Actions Employers Should Take on COBRA

On March 11th, a new COVID-19 stimulus bill was signed into law. The American Rescue Plan Act provides aid for individuals who lost coverage under a group health plan.

COBRA allows those who have experienced a reduction in hours or involuntarily lost their employment to keep their health insurance if they continue to pay their premiums in full. Thanks to ARPA, employees can now benefit from COBRA subsidies, meaning that they can keep their health benefits without paying.

Here’s what employers must do going forward, and how we can help you achieve these goals.

Identify Beneficiaries

In addition to those who are already on COBRA, qualifying individuals who did not elect COBRA can now benefit from the new law. Inform them of the possibility to enroll now. The same goes for those who were previously covered by COBRA but later discontinued it.

Send them a notice no later than May 31, 2021, and they must respond within 60 days after they receive their notice or no earlier than April 1, 2021.

Send the Notice

Your notice should inform eligible employees of subsidiary eligibility and must include the name, address, and telephone number for the plan or COBRA administrator.
If they become eligible under another group health program or Medicare, they must notify the plan administrator or face penalties- this and the extended election period must be clearly outlined in your notice.

Offer Alternative Coverage

Employers have the chance to offer alternative coverage, subject to some conditions. This alternative medical plan must also be available to active employees, cannot be a QSEHRA or FSA, and cannot only provide excepted benefits.

The plan they choose must not exceed the premium of the plan they were enrolled in at the time of the COBRA qualifying event and they must enroll within 90 days after your notice.

In broad strokes, this is what you should do going forward. We can help you every step of the way in making sure eligible individuals get the help they need!

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