Important Guidance on COBRA Premium Assistance & ARPA Expiration Notices

August 26, 2021

ARPA Expiration Notice & Timing

The American Rescue Plan Act (ARPA) provides 100% premium assistance to maintain major medical, dental, and vision coverage(s) to individuals who experience an involuntary termination or reduction of hours from April 1, 2021-September 30, 2021.

One of the final notices required to be sent by ARPA is to notify eligible COBRA participants that their subsidy will be ending and outline critical information following the subsidy expiration. These expiration notices are required to be sent to subsidy participants between 45-15 days before the subsidy ends. Chard Snyder will automatically send the ARPA Subsidy Expiration Notice to any subsidy participant whose COBRA coverage will expire on or after 10/1/2021, 30 days ahead of the subsidy expiration. Chard Snyder will also be including Premium Billing coupons for individuals who have balances due from 10/1/2021 thru the end of their current plan year, if applicable. 

Our goal is to provide your COBRA participants with all of the necessary information to either continue with their current COBRA coverage or learn of alternative coverage options that may be available. COBRA participants whose coverage expires during the ARPA subsidy period will not receive an ARPA Subsidy Expiration Notice. Instead, those participants will receive the required COBRA Termination Notice following their COBRA Expiration.  Please note, there is no additional charge associated with this mailing.

Looking Back

On July 26, 2021, the IRS issued Notice 2021-46 to provide further guidance related to the American Rescue Plan Act (ARPA). The Notice detailed information regarding extended coverage of COBRA continuation coverage, the interaction between previous COBRA continuation coverage election and current other group health plan coverage eligibility, state mini-COBRA continuation coverage, and claiming the premium assistance credit by an employer or an insurer. 

Noteworthy reminders regarding the implementation of the premium subsidy include:

  • A qualifying event of reduction in hours or involuntary termination in employment must be the original event. An individual remains an assistance eligible individual (AEI) if the original qualifying event was extended by a second qualifying event, disability, or state mini-COBRA.
  • An AEI must elect COBRA coverage within 60 days of receiving their notice of premium assistance to be eligible for the premium assistance. The AEI, however, may still have the extended period to elect COBRA, but would not be eligible for the premium assistance.
  • An AEI who elects COBRA continuation coverage with COBRA premium assistance and who declines to elect retroactive COBRA continuation coverage at that time cannot later elect retroactive COBRA continuation coverage.
  • Individuals who are eligible for COBRA but who have not elected coverage can choose to start their coverage as of April 1, 2021 or later and can choose within 60 days of receipt of the notice to elect or decline any retroactive coverage.
  • If an employer is subject to COBRA and state mini-COBRA continuation coverage, the employer is eligible for the premium subsidy even if an AEI is required to pay the premiums directly to an insurer. The insurer is not entitled to claim the COBRA premium assistance credit.
  • If an AEI elected COBRA continuation coverage for dental- or vision-only coverage and subsequently becomes eligible to enroll in other disqualifying group health plan coverage or Medicare that does not offer dental or vision coverage, the individual’s premium assistance ends even if the other coverage does not include all of the benefits.

For questions regarding the premium assistance credit, please consult a tax professional.

Answers to more general questions regarding ARPA can be found on our dedicated COVID resources page, which includes a webinar recording, extensive FAQs, and other information regarding ARPA and its effects on healthcare benefits.