As we discussed in our client alert, on March 11th, President Biden signed the American Rescue Plan Act of 2021 (“ARPA”), which, among other things, requires an individual’s former employer or the insurance company (depending on the type of plan) to cover the full cost of COBRA premiums for any period of coverage between April 1, 2021 and September 30, 2021 (the “COBRA Subsidy”) for an eligible employee (generally, someone who was involuntarily separated or who had a reduction in hours). The employer or insurance company that pays these premiums may claim a tax credit to defray the cost of the premiums. ARPA also creates a Special Election Period where all individuals who lost group health insurance coverage within the past 18 months due to an involuntary separation or reduction in hours are required to receive notice of the COBRA Subsidy and their ability to elect COBRA by May 31, 2021. On April 7, the Department of Labor (“DOL”) issued the model notices as well as Frequently Asked Questions (“FAQs”) related to ARPA and COBRA.
Read MoreOn March 11th, President Biden signed the American Rescue Plan Act of 2021 (“ARPA”). Employers should take note of two ARPA provisions in particular: (1) Mandatory COBRA premium subsidies and (2) the expansion and voluntary extension of FFCRA leave.
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