ARPA COBRA Enrollment
Are individuals who previously declined COBRA coverage or discontinued COBRA coverage potentially eligible for the subsidy?
Yes. If an individual whose COBRA qualifying event was either an involuntary termination of employment or reduction of hours either has not elected COBRA, or previously elected COBRA and discontinued COBRA coverage before April 1, 2021, the individual may elect COBRA continuation coverage pursuant to a special “second chance” election right. If elected, the subsidized coverage will commence April 1, 2021. Note that this rule differs from the normal COBRA rules which require the coverage to be effective as of the date of the original loss of coverage.
This special election period begins on April 1, 2021 and ends 60 days after notice of the election period is provided. Plan administrators must provide this notice within 60 days of April 1, 2021.
Importantly, if COBRA is elected pursuant to this special election period, it does not extend the duration of the applicable COBRA period. That period continues to run from the date that would have applied if the individual had initially elected COBRA or, in the case of an individual who discontinued coverage, from the original COBRA commencement date. For example, a qualified beneficiary whose COBRA period would have normally run during the 18 month period commencing July 1, 2020 and ending Dec. 31, 2021, does not have his or her maximum period extended to 18 months following the April 1, 2021 effective date applicable under the special election rules – the end date for the COBRA period would continue to be Dec. 31, 2021.
What is the premium subsidy period?
The premium subsidy is available with respect to any premium owed for a period of COBRA coverage beginning on April 1, 2021 and ending on Sept. 30, 2021. If an AEI has already paid the applicable premium for the month of April 2021, the AEI is entitled to a refund of the premium paid. The refund is due within 60 days of the date of payment.
Can the premium subsidy for an AEI end prior to Sept. 30, 2021?
Yes. Premium subsidies do not apply with respect to an AEI for months of coverage beginning on or after the first date an AEI is eligible for coverage under another group health plan (other than coverage for excepted benefits, a health care flexible spending account, or a qualified small employer health plan) or Medicare. Premium subsidies are also not available for any period following the maximum period of continuation coverage required under COBRA for the AEI.
An AEI is required to notify the plan administrator of the group health plan if he or she is eligible for other disqualifying coverage and is subject to monetary penalties for failing to do so.
Alternate Plan Coverage Enrollment Option
May an AEI elect a different coverage option in connection with a COBRA election? Yes, but only if the employer permits such an election. A group health plan, may, but is not required to, permit an AEI to elect a different coverage option than the one the qualified beneficiary is enrolled in at the time of the qualifying event. Under normally applicable COBRA rules, a qualified beneficiary may only elect the coverage that is in effect immediately preceding the qualifying event, subject to the right to change coverage during open enrollment or in connection with a HIPAA special enrollment right. Under ARPA, the employer can permit an AEI to change his or her coverage option if: (1) the premium for the new coverage option does not exceed the premium for coverage in which the individual was enrolled at the time of the qualifying event (e.g., the AEI can elect less expensive coverage); (2) the different coverage is also offered to similarly situated active employees; and (3) the different coverage is not coverage that only provides excepted benefits (e.g., stand-alone dental or vision coverage), a qualified small employer health reimbursement arrangement, or a health flexible spending arrangement.
The election to change to an alternate coverage option must be made within 90 days of the date the AEI is notified of the alternative plan coverage enrollment option.
Yes. If an individual whose COBRA qualifying event was either an involuntary termination of employment or reduction of hours either has not elected COBRA, or previously elected COBRA and discontinued COBRA coverage before April 1, 2021, the individual may elect COBRA continuation coverage pursuant to a special “second chance” election right. If elected, the subsidized coverage will commence April 1, 2021. Note that this rule differs from the normal COBRA rules which require the coverage to be effective as of the date of the original loss of coverage.
This special election period begins on April 1, 2021 and ends 60 days after notice of the election period is provided. Plan administrators must provide this notice within 60 days of April 1, 2021.
Importantly, if COBRA is elected pursuant to this special election period, it does not extend the duration of the applicable COBRA period. That period continues to run from the date that would have applied if the individual had initially elected COBRA or, in the case of an individual who discontinued coverage, from the original COBRA commencement date. For example, a qualified beneficiary whose COBRA period would have normally run during the 18 month period commencing July 1, 2020 and ending Dec. 31, 2021, does not have his or her maximum period extended to 18 months following the April 1, 2021 effective date applicable under the special election rules – the end date for the COBRA period would continue to be Dec. 31, 2021.
What is the premium subsidy period?
The premium subsidy is available with respect to any premium owed for a period of COBRA coverage beginning on April 1, 2021 and ending on Sept. 30, 2021. If an AEI has already paid the applicable premium for the month of April 2021, the AEI is entitled to a refund of the premium paid. The refund is due within 60 days of the date of payment.
Can the premium subsidy for an AEI end prior to Sept. 30, 2021?
Yes. Premium subsidies do not apply with respect to an AEI for months of coverage beginning on or after the first date an AEI is eligible for coverage under another group health plan (other than coverage for excepted benefits, a health care flexible spending account, or a qualified small employer health plan) or Medicare. Premium subsidies are also not available for any period following the maximum period of continuation coverage required under COBRA for the AEI.
An AEI is required to notify the plan administrator of the group health plan if he or she is eligible for other disqualifying coverage and is subject to monetary penalties for failing to do so.
Alternate Plan Coverage Enrollment Option
May an AEI elect a different coverage option in connection with a COBRA election? Yes, but only if the employer permits such an election. A group health plan, may, but is not required to, permit an AEI to elect a different coverage option than the one the qualified beneficiary is enrolled in at the time of the qualifying event. Under normally applicable COBRA rules, a qualified beneficiary may only elect the coverage that is in effect immediately preceding the qualifying event, subject to the right to change coverage during open enrollment or in connection with a HIPAA special enrollment right. Under ARPA, the employer can permit an AEI to change his or her coverage option if: (1) the premium for the new coverage option does not exceed the premium for coverage in which the individual was enrolled at the time of the qualifying event (e.g., the AEI can elect less expensive coverage); (2) the different coverage is also offered to similarly situated active employees; and (3) the different coverage is not coverage that only provides excepted benefits (e.g., stand-alone dental or vision coverage), a qualified small employer health reimbursement arrangement, or a health flexible spending arrangement.
The election to change to an alternate coverage option must be made within 90 days of the date the AEI is notified of the alternative plan coverage enrollment option.
