Significant Changes to COBRA & State Continuation

Any employees that were/are involuntarily terminated or laid off, may qualify for premium relief.

You may be required to notify eligible employee(s) before 05/31/2021.

Please see below for details regarding how to proceed:

We are not a third-party COBRA administrator. We assume no liability for notices; the information below is a courtesy based on what has been disclosed to us as of 05/05/2021. Please consult your carrier, TPA, or legal team before taking action.

Did you have more than 20 employees in 2020?

If so, here are the COBRA Requirements:

Subsidy Eligible Employees

Currently enrolled in COBRA - they have 100% subsidized continuation starting on April 1, 2021 until through September 2021.
Eligible but did not elect - they must be given the opportunity to make an election during a new extended lookback election period which ends 60 days after they are notified. They can elect starting April 1, 2021 and can use the subsidy until the end of their original COBRA time frame or September 30, 2021, whichever comes first.
If they elected coverage and then dropped - they must be given another chance to enroll in COBRA for 4/1/21, provided they are still within the 18-month COBRA time frame.
As someone is eligible moving forward - for COBRA starting April 1, 2021 or later, they are eligible for the subsidy starting on April 1, 2021 until 09/30/2021.

Allowances for Clients/Employers

The employer will be reimbursed 100% of the total COBRA premium (102% of the actual cost) by a credit against payroll taxes or as refund of an overpayment.
A plan may but is not required to permit an subsidy eligible to elect different coverage for a lower cost if offered. Those eligible would have 90 days after notice of the option to make the election.

Required COBRA Notifications & Dates

A Notice informing those eligible must be provided by May 31, 2021. See the department of Labor site for model notices https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy
A Notice of subsidy expiration must be sent between 15 and 45 days before the end of the period. See the department of Labor site for model notices https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy
If you have a COBRA administrator such as PacificSource Administrators or TASC, they may be handling these notices for you. Please contact them directly to ensure notices are being sent.

Did you have under 20 employees in 2020?

If so, here are the State Continuation Requirements:

Subsidy Eligible Employees

Newly terminated or laid off employees - The benefit does not go retro, this is only moving forward for those terminated or laid off. (For example, if someone was laid off in February and did not enroll in continuation, they are not eligible now).
The employee would fill out a carrier enrollment form and enroll. (For example, someone terminated 4/16 and would like to enroll in State Continuation as of 5/1. They would be subsidy eligible from 5/1-9/30).
If someone is currently enrolled in continuation - If they qualify due to termination or layoff, then please provide notice, so we may reach out to the carrier for the subsidy enrollment.

Allowances for Clients/Employers

The carrier waives the premiums and takes a tax credit until September of 2021 when the subsidy expires.

Required State Continuation Notifications & Dates

There is still guidance pending from carriers regarding when/if notices will be sent out. We believe members currently enrolled in State Continuation will be notified by the carrier. However, please contact your specific carrier for details.

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