The COBRA premium subsidy program established under the American Rescue Plan Act of 2021 comes to an end on September 30, 2021. A few things for employers to keep in mind as this program winds down:
- Individuals receiving the COBRA subsidy (referred to as assistance eligible individuals or AEIs) must be given written notice at least 15 days before the subsidy ends. The notice must identify the date the subsidy ends and that the AEI may be able to continue COBRA coverage (or possibly other coverage, if applicable) without any premium assistance. You can find a model notice on the Department of Labor’s COBRA Premium Subsidy webpage.
- If an AEI’s period of coverage begins mid-month and extends into October, then the individual is entitled to the full subsidy for that entire period of coverage. For example, if the period of coverage runs from September 15 to October 14 and the COBRA premium for that entire period is $700, then the entire $700 must still be subsidized.
- Unless the AEI is also reaching the end of the maximum COBRA coverage period at the end of September, the COBRA coverage must automatically continue, assuming that the AEI submits timely COBRA premium payments per the plan’s normal COBRA procedures.
If you have any questions about the COBRA premium subsidy, Warner can help! Please contact Norbert Kugele, Stephanie Grant or any other member of Warner’s Employee Benefits/Executive Compensation Practice Group.
