The North Dakota Employer’s Blog: The American Rescue Plan Act of 2021 (“ARPA”)

| Mar 31, 2021 | Employer Rights, The North Dakota Employer's Blog

Did you know . . .

In our last post, we informed you that President Biden recently signed into law the American Rescue Plan Act of 2021 (“ARPA”), which included a host of provisions affecting employers.  One significant mandate of the ARPA is the requirement for employers to offer 100% subsidized COBRA continuation coverage to certain employees and their qualified beneficiaries, known as “assistance eligible individuals.”  Assistance eligible individuals include those who are eligible for COBRA as a result of an involuntary termination of employment or a reduction in hours and those who are, or could have been, eligible for COBRA during the period of April 1, 2021 through September 30, 2021 (the “subsidy period”).

Importantly, this COBRA subsidy is available to these eligible individuals who are (or will be) enrolled in COBRA for continued coverage during the subsidy period, as well as those individuals who did not elect COBRA continuation or dropped it prior to April 1, 2021, but would still be within their 18-month coverage during the subsidy period.  Plan administrators are required to provide notice to both types of assistance eligible individuals.  The United States Department of Labor is expected to issue model notices in April.

Employers will be reimbursed through tax credits against their quarterly payroll taxes for the costs of providing the subsidized coverage within the subsidy period.  Notably, ARPA did not extend the COBRA coverage period.  Therefore, if an individual exhausts the maximum COBRA period of coverage, the subsidy can end.  The subsidy can also end if an individual becomes eligible for Medicare or another group health plan.

Federal agencies are expected to release guidance to help employers and their group health plans navigate this ARPA mandate.  For more information, contact your Vogel Law Firm employment law team.

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