Maybe both. Assuming the person was covered by a health insurance plan at each employer, both companies are required to send COBRA notices, and each company could be responsible for the ARPA grant for part or all of the subsidy period. The person has the choice between COBRA coverage. Individuals are not eligible for COBRA when they are enrolled in another group health insurance plan, and individuals lose their eligibility for the subsidy if they are eligible for another group health insurance. ARPA requires that subsidized COBRA coverage be offered to those who cancelled COBRA or never voted in favor. It appears that the employee would be entitled to the subsidy until the end of a waiting period in the other employer`s plan. In many cases, former employees would immediately be entitled to enroll in a new employer`s plan or spousal plan after losing a job or other employer-sponsored coverage. In both cases, however, wait times or similar restrictions may prevent a former employee from registering immediately. Neither the ARPA nor the LOL FAQ specify whether a former employee who is subject to a waiting period is “eligible” for other coverage and is therefore not eligible for the COBRA grant.

It should be noted that the examples of notices issued by the DOL indicate that eligibility for coverage does not include the use of past wait times. In a long-awaited guidance, the Internal Revenue Service provided its views on the implementation of the COBRA provisions on temporary premium grants in the American Rescue Plan Act of 2021 (ARPA) in Notice 2021-31. So, FWIW, whether you`re an employer or an employee, ARPA COBRA grants should be A-OK. For employers who need help updating their exit agreement templates, LMK only. Or call your other favorite BakerHostetler contact. Third, employers need to remember to send notices when a person`s subsidies are about to expire. These warnings must be sent between 15 and 45 days before the end of the grant. Probably. To date, neither the ARPA nor the DOL guidelines have addressed an employer`s obligations when the employer is actually aware of an individual`s eligibility for other coverage. The DOL notice template indicates that an employer may issue a notice of termination due to the “end of premium support”. The FAQ does not require employers to inquire about other coverages, but eligibility for Medicare would end an individual`s eligibility for the subsidy. Employers may want to send a notice informing the employee that the subsidy ends with the employee`s eligibility for Medicare before starting to collect a COBRA premium, even if the person has not communicated their eligibility for Medicare.

The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 11, 2021. Among other things, ARPA is making significant changes to cobra administration by providing for an additional COBRA registration fee and a temporary 100% COBRA premium grant from April 1, 2021 to September 30, 2021. These provisions apply to employees and former employees who have lost group coverage due to involuntary dismissal or involuntary reduction of working hours. If a business makes a taxable lump sum payment under an initial agreement that is supposed to represent six months of COBRA premiums, can the company claim a Medicare tax credit for the value of that lump sum payment? Some employees are hired under a voluntary but fixed-term employment contract. For example, an employee could be hired for six months. Or an employee is hired for a specific season that starts in April and ends in September. In these cases, does the achievement of the fixed term mean an involuntary termination of the employment relationship? Generally, the IRS`s view expressed in 2009 was that failure to return to work after the end of the original contract constituted involuntary termination. In particular, involuntary termination could include the employer`s failure to renew a contract at the time of contract expiry if the employee was willing and able to enter into a new contract with terms similar to those of the expiring contract and continue to provide the services. This applies even if the employer has simply not offered additional work and is not limited to a case in which the employer expressly dismisses the employee.

With this change in legislation, employers may need to make two changes to their exit agreement templates. Dental care, vision and RHS are eligible for superior support. Retiree coverage is also eligible, but only if it is offered under the same group health insurance plan as the coverage offered to active employees. The notice does not explicitly address other COBRA-compatible services such as EAPs or on-site clinics, but we assume that to the extent that an employer has determined that these benefits are subject to COBRA, it should also be eligible for the subsidy. First, severance agreements generally warn that benefit coverage ends on the last day of employment (or the last day of the month) and that the employee can then continue to cover under COBRA at their own expense. According to the ARPA, the maintenance of the benefit is no longer the responsibility of the employee. From April 1 to September 30, involuntarily dismissed employees can sign up for COBRA coverage and not pay premiums for six months. Some employers offer COBRA continuation coverage paid for a portion of the COBRA continuation period as part of individual or group severance programs if the employee chooses COBRA coverage after receiving the notice. .