Are there any COBRA subsidy penalties?

There are potential penalties for employers and individuals who are not in compliance with the COBRA subsidy rules. For Employers or Plan Sponsors: Employers who violate COBRA rules (including the requirement to offer a COBRA election and subsidies under the ARPA) could be subject to penalties equal to $100 per qualified beneficiary or $200 per […]

Should current COBRA participants continue to pay premiums?

Yes. Until an individual is notified that they are eligible for a COBRA subsidy, active COBRA participants should pay premiums. Active COBRA participants who have paid premiums will either receive a credit against future premium payments or receive a refund if no future premiums are due.

Who receives the subsidy? Does anyone need to pay premiums?

Plan sponsors are responsible for paying premiums to the carrier and will receive a tax credit against their quarterly payroll taxes. The specific process to claim these credits has not yet been released. However, when subsidies were offered under the Affordable Care Act, IRS Form 941 was made available for plan sponsors to claim this […]

How long do AEIs have to elect a subsidy?

AEIs will have 60 days from notification to elect coverage under the subsidy. Coverage can be reinstated retroactively to April 1, 2021. AEIs who are not currently enrolled in COBRA will be required to elect coverage through a Second Election Period. All AEIs regardless of their current coverage status will need to formally attest to […]

What is the second election period?

All Assistance Eligible Individuals (AEIs) will have a second election period in which they can elect coverage under the subsidy even if they did not originally enroll in coverage.

What types of notifications are required for the COBRA subsidy?

Model General Notice and COBRA Continuation Coverage Election Notice For use by group health plans for qualified beneficiaries who have qualifying events occurring from April 1, 2021 through September 30, 2021 A summary of the subsidy provisions is to be attached and includes a form for individuals to request to be treated as an AEI […]