The DOL has issued updated model COBRA notices to incorporate information regarding the new COBRA subsidy included in the recent passing of the American Rescue Plan Act 2021 (ARPA) and has provided some additional guidance, in particular referencing those states with ‘mini-COBRA’, Cal-COBRA in California. It looks like those former employees that are currently on Cal-COBRA would be eligible for the subsidy, but there will be no special enrollment period to allow those who waived to re-enroll. I will let you know if additional clarification is provided that would allow former Cal-COBRA eligible employees to have a special enrollment period.
STATE COBRA LAWS
Some states impose their own requirements, which can extend beyond the time limits for federal COBRA. California and New York, for instance, requires COBRA for terminated employees with no other qualifying conditions for a period of 36 months. States may also require health care continuation coverage by small employer plans not subject to federal COBRA.
The new guidance states that “the premium assistance is also available for continuation coverage under certain state laws,” and applies to “state continuation coverage (‘mini-COBRA’) laws.” The ARPA, however, does not change any requirement of a state continuation coverage program, the guidance states. The law “only allows assistance eligible individuals who elect continuation coverage under state insurance law to receive premium assistance from April 1, 2021, through Sept. 30, 2021.”
The implication here is that if state mini-COBRA laws expand the COBRA period (such as to 36 months instead of 18 for basic COBRA), then the federal subsidy applies for those who have been receiving COBRA coverage beyond 18 months, but the subsidy will still expire on Sept. 30. The subsidy also applies to small employer plans subject to state continuation-coverage requirements.
This notice is for any qualified beneficiary who loses coverage due to a reduction in hours or involuntary termination of employment with COBRA beginning at some point between April 1 – Sept. 30 of this year. This notice may be provided as a supplement to your standard COBRA election notice or its terms may be incorporated into your COBRA election notice.”
This notice is for AEIs who are still in their 18-month COBRA window in April 2021. For plans that terminate coverage on the last day of the month, this will be anyone who was involuntarily terminated or lost coverage due to a reduction in hours on or after Oct. 1, 2019. The notice is due to eligible employees before May 31, “whether the individual is currently enrolled in COBRA, previously declined COBRA or enrolled and later dropped COBRA.
This notice is for COBRA coverage subject to state health plan continuation requirements.
This notice must be sent to AEIs 15 to 45 days before their COBRA subsidy will expire.