As we reported in our March 15^th Alert, the American Rescue Plan Act (“ARPA”) was signed into law by President Biden on March 11, 2021. Most notably for employers and plan sponsors, ARPA provides relief to certain COBRA beneficiaries referred to as “assistance eligible individuals” (“AEIs”), in the form of a 100% premium subsidy for both federal and state COBRA coverage. The subsidy is available for COBRA coverage provided to AEIs between April 1, 2021 and September 30, 2021.  As a reminder, AEIs generally include employees or dependents who lose group health plan coverage due to an involuntary termination of employment or reduction in hours.

ARPA provides some information about the subsidy including its length, certain notice requirements, and how it will be paid, along with some details on a new special COBRA election period and rules about changing plan coverage. However, the provisions in the Act left employers with more questions than answers regarding certain situational and logistical implications as they scrambled to understand the requirements before April 1^st. Some of the answers to these questions came on April 7^th, when the Employee Benefits Security Administration (“EBSA”) released a “COBRA Premium Subsidy” webpage that includes a FAQ document,  links to four Model Notices required by ARPA, and a Summary of Premium Assistance Provisions.