American Rescue Plan Act of 2021
On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed by President Biden. ARPA is a $1.9 trillion economic stimulus package proposed by Biden to speed up the United States' recovery from the economic and health effects of the COVID-19 pandemic.
ARPA includes a provision for a COBRA continuation coverage premium subsidy of 100 percent for individuals and families who experienced an involuntary termination of employment or reduction in hours.
This subsidy will be available for Assistance Eligible Individuals (AEIs), as determined by the Act, from April 1, 2021 through September 30, 2021. COBRA participants must meet the below criteria in order to be an AEI:
1. Coverage was lost due to involuntary termination of employment or reduction in hours.
2. The COBRA participant is still within the COBRA eligibility period as of April 1, 2021.
3. Eligible COBRA participants who do not have an election in place will have the opportunity to make an election during an Extended Election Period and will be able to take advantage of the subsidy effective April 1, 2021. This will be referred to as the “lookback
period” in determining member eligibility.
4. Eligible COBRA participants who have an election in place as of April 1, 2021 will be able to take advantage of the subsidy effective April 1, 2021.
5. Eligible COBRA participants who become eligible for COBRA continuation coverage on or after April 1, 2021 will be eligible for the subsidy while it is in effect.
To help you determine if COBRA participants are eligible for the subsidy, Pro-Flex will provide two tools: a report for listing all participants in the lookback period, and a utility for performing a mass update of the subsidy eligibility per member. ARPA requires the Department of Labor (DOL) to provide model notices within 30 days from the date of enactment – on or before April 10.
We will review these model notices and incorporate the DOL’s language into a set of standard subsidy notices, referred to as AEI Notices.
The Act requires that individuals in the lookback period, as well as those currently enrolled, receive a notification regarding the subsidy within 60 days of April 1, 2021; newly eligible COBRA participants should be notified within the current standard COBRA time frames.
As with any legislative or regulatory changes affecting COBRA participants, Pro-Flex will create and develop new functionality to assist in automating and simplifying administration for you, our valued partner. Pro-Flex is actively working with our software vendor to determine additional requirements and functionality needed. We will communicate more details about the nature and timing of platform updates and associated processes next week.
Vice President of
Operations for Benefits, Chris Byrd.
Pro-Flex Administrators LLC
