ARPA Subsidy Period Expiration Reminder and Updated Guidance
Subsidy Period Expiration Notice
ARPA requires subsidy expiration notices to be sent to Assistance Eligible Individuals (“AEIs”) prior to the expiration of the Subsidy Period. This Expiration Notice should be sent no more than 45 days and no less than 15 days prior to the expiration of the Subsidy Period. The Expiration Notice should advise of the date the Subsidy is to expire, and a statement that the individual may be eligible for coverage without premium assistance through COBRA continuation coverage or under a group health plan.
This notice is not required for instances in which the loss of the Subsidy is due to the AEI becoming eligible for other group coverage or the maximum COBRA eligibility period ends prior to September 30, 2021.
We are now within the 45 day period of the subsidy’s expiration date, so the notice may be provided at any time. Plan administrators are required to provide the notice no later than September 15, 2021.
If you are not working with a COBRA administrator to coordinate this on your behalf The Department of Labor, the Treasury and the Department of Health and Human Services have created a model expiration notice.
Guidance on ARPA COBRA Subsidy
In addition to the upcoming deadline, The IRS recently released IRS Notice 2021-46, which provides new guidance and clarifications regarding the COBRA premium subsidy in the American Rescue Plan Act (“ARPA”). This notice follows an earlier release of IRS FAQs in Notice 2021-31.
Notice 2021-46 provides background information about the COBRA premium assistance, addresses several questions with specific examples and exceptions provided, and provides technical guidance on claiming the tax credit in connection with the subsidy.
Plan sponsors and issuers might need to amend their Form 941 filings if their previous interpretations of ARPA requirements resulted in incorrect filing.
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