As you know COBRA administrator, Benafica, has been keeping track of the ongoing developments regarding the Government subsidized COBRA clauses in the American Rescue Plan Act for 2021 (ARPA) that was signed into law by President Joe Biden on March 11, 2021 and takes effect on April 1, 2021.
The ARPA allows individuals and family members who have been involuntarily terminated or experienced a reduction in work hours to continue health insurance through their employer with a 100% COBRA subsidy.
This communication is intended to continue to keep you up to date with important information.
Key upcoming dates:
April 1, 2021
Subsidized COBRA takes into effect.
April 10, 2021
The Department of Labor will issue new Election Model Notices.
April 20th, 2021
For our COBRA clients, Benafica will mail the special COBRA election notice to individuals who have been involuntarily terminated or had a reduction in hours and who are still in their 18 month COBRA coverage period at no additional cost. Qualified beneficiaries must elect within 60 days of being provided the new election notice.
April 25th, 2021
The Department of Labor will issue new Subsidy Expiration model notice.
May 1st, 2021
For our COBRA clients, Benafica will mail the Subsidy Expiration Notice to enrolled Qualified Beneficiaries no more than 45 days, and no less than 15 days, prior to the premium subsidy expiration date at no additional cost.
Subsidy payment and subsequent reimbursement:
According to the ARPA 2021, 100% of the cost of the COBRA subsidy must be paid upfront by the Employer, and then the cost will be offset through a payroll tax credit against the Section 3111(b) Medicare tax. The credit will include the entire COBRA premium. More information and guidance on the tax credit procedures is expected from the Department of Labor and the IRS to determine the exact procedure.
Discuss Your COBRA Options With Benafica
Remaining compliant with COBRA administration can be complex, by working with Benafica you will remain current and compliant with changing regulations. Contact us today if you have questions or are not currently utilizing our COBRA administration services.
To learn more about how we can help you, feel free to schedule a free consultation or call our St. Paul office today at 651-287-3253. You can also get in touch with us via our contact form, and a representative will reach out to you promptly.