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Cobra Subsidy Expiration Notice

When the American Rescue Plan Act (ARPA) became law, it added many new compliance responsibilities to employers sponsoring group health plans subject to federal COBRA or state continuation laws.

 Employers can find additional information on the ARPA COBRA premium assistance here. Those responsibilities aren’t over just yet, as many employers will soon need to send out one final notice informing people who are receiving COBRA subsidies that those subsidies are about to expire.


ARPA required all group health plans (included insured and self-funded plans) subject to COBRA or state continuation to provide subsidized coverage to all eligible assistance individuals (AEIs). The employer, insurer or multi-employer plan sponsor offsets the subsidy cost through a payroll tax credit. The credit includes the entire COBRA premium, including the 2% administrative fee. Beginning in April, employers were required to provide notice of the availability of the subsidy, notice of the extended election period for COBRA coverage and a summary of the COBRA premium provisions under ARPA.

The Final Notice

ARPA’s COBRA subsidies may have already expired for AEIs whose COBRA or state continuation eligibility has run out. For all other AEIs, under ARPA, the COBRA subsidy will expire on September 30, 2021. We have not yet seen any extension to this date. The final notice, the Notice of Expiration of Premium Assistance, must be provided to all AEIs 15-45 days before their premium assistance expires. Therefore, employers will need to provide most of their AEIs with this notice prior to September 15, 2021. If an AEI became eligible for coverage under another group health plan or Medicare, the notice is not required.

Employers should review their records now and make sure all their enrolled AEIs receive this required notice. If you haven’t heard from your TPA, reach out now to make sure steps are in place to meet ARPA’s requirements.

For more information on how to ensure your organization remains compliant, visit OneDigital's Compliance Confidence page.