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New COBRA Subsidy Requires Quick Action by Plan Sponsors
March 23, 2021
New COBRA Subsidy Requires Quick Action by Plan Sponsors

The American Rescue Plan Act of 2021 (ARPA), signed by President Biden on March 11, 2021, includes a number of provisions designed to assist workers impacted by the COVID-19 pandemic. Among them is a new COBRA premium subsidy that pays for 100 percent of the applicable COBRA premium for eligible individuals with respect to coverage periods beginning April 1, 2021 and ending Sept. 30, 2021.

In order to comply with the law, employers will face a number of challenges and additional administrative responsibilities, including the identification of premium subsidy eligible individuals, contacting previously terminated employees not currently enrolled in COBRA but who are eligible for the premium subsidy, revising or supplementing existing COBRA notices, and satisfying new notice requirements.


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