Employers—Do You Want To Talk About These New COBRA Subsidies or Emotional Support Animals In The Workplace?
Yeah, I know, let’s talk about the adorable animals your employees want to bring in to work. That’s tomorrow, but first, a word about COBRA under the American Rescue Plan Act of 2021 (ARPA).
As we have parsed through new paid sick and medical leave language under this new law, on April 7, 2021, the U.S. Department Of Labor (DOL) dropped some helpful Q&A guidance about ARPA’s effect on COBRA. You know, COBRA, the federal law that allows employees to continue health care coverage temporarily under certain circumstances—like a termination from employment.
Last week, DOL confirmed that ARPA provides fully subsidized COBRA continuation coverage for certain individuals beginning on April 1, 2021 and ending on September 30, 2021. It also applies to state mini-COBRA laws. That means eligible workers do not have to pay any COBRA premiums from April 1, 2021 through September 30, 2021.
The employer pays the entire subsidy. Then, the ARPA funds reimburse the employer (or plan administrator or insurance company) directly through a COBRA premium assistance credit.
Do All Employees Benefit from ARPA?
No, they must be eligible.
To benefit from ARPA, a worker must be an “Eligible Assistance Individual,” defined as an employee or former employee that loses group medical coverage because the individual is eligible for COBRA continuation coverage by reason of a qualifying event.
What kind of “qualifying event” is ARPA talking about? My employee benefits law partners Mark Matthis and Bob Ellerbrock explain that these events include:
a reduction in hours (such as reduced hours due to change in a business’s hours of operations, a change from full-time to part-time , taking of a temporary leave of absence, or an individual’s participation in a lawful labor strike, as long as the individual remains an employee at the time that hours are reduced); or
an involuntary termination of employment (EXCEPT if due to gross misconduct or a voluntary termination).
The right to subsidized COBRA stretches back in time to any employee or former employee who experienced one of these events and did not elect COBRA or elected COBRA, but is no longer enrolled in COBRA coverage because the premiums were too expensive to be affordable.
If the 18-months of COBRA could end on or after April 1, 2021 and on or before September 30, 2021, an employee can receive fully subsidized CORBA coverage. There are exceptions, which my law partners will discuss in an upcoming client alert.
What Should Employers Do?
Mark and Bob recommend that employers:
compile a list anyone who was involuntarily terminated after Saturday, Tuesday, October 1, 2019, and
engage stakeholders, including third party administrators or insurance carriers who administer COBRA for plan sponsors and internal payroll staff and outsourced payroll providers.
Want to read all 10 pages of the Q&A? I’ve got you. You can geek out on it all here. DOL even provided model notices—you can find them all here.
Oh, you want even more information? We’ve got that too. My employment law partner and friend, the one and only Eric Meyer, will host the Employer Handbook Zoom Office Hour on Friday, April 23, 2021, will be a Beverages and Benefits edition starring our benefits partners and yours truly for the employment law piece.
Emotional support animals are everywhere. Tomorrow, I’ll post about steps employers should take when a worker requests to bring an emotional support animal to work.