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Employer Obligations under the New COBRA Subsidy Mandate
The American Rescue Plan Act includes several provisions that employers need to be aware of and address within their Human Resources procedures. The most significant is a
100% COBRA subsidy that employers must provide to Assistance Eligible Individuals (AEIs), who are generally employees who experience involuntary termination (for reasons other than gross misconduct) or a reduction in hours that disqualifies them from the employee benefit plan.
The Act mandates that employers must pay the entire COBRA premiums for AEIs during a six-month period, beginning on April 1, 2021 and ending on September 30, 2021.
The Act does not extend the 18-month COBRA period, but it does provide additional relief to participants in the following ways:
Wednesday, April 28, 2021
The COBRA subsidy period (April 1, 2021 – September 30, 2021) has begun and with a number of issues still outstanding, employers have no time to lose when it comes to preparing to administer the COBRA subsidy required by the American Rescue Plan Act (ARPA) enacted on March 11, 2021. While we have received limited guidance from the U.S. Department of Labor (DOL), we still expect and await additional guidance from the DOL and the Internal Revenue Service (IRS). Below are considerations for employers to begin thinking about now, including upcoming notice obligations.
Determine whether the employer’s plan is covered under the COBRA subsidy rules. All group health plans subject to federal COBRA and mini-state COBRA (e.g., this commonly includes fully-insured plans) are subject to the COBRA subsidy rules.
ARPA Provides for Full COBRA Premium Subsidies | Ryley Carlock & Applewhite jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.