DOL Issues Clarifying FAQs Regarding ARPA
On April 7, 2021, the U.S. Department of Labor (DOL) released Frequently Asked Questions (FAQ) and model notices to implement the COBRA subsidy provisions in the American Rescue Plan Act of 2021 (ARPA).
The FAQ guidance address a number of the questions that employers have been asking since ARPA was signed into law. Specifically, the guidance clarifies:
- The subsidy applies to persons who have lost coverage due to either a reduction in hours or an involuntary termination. The termination must be involuntary in order for the individual to qualify for the subsidy. The reduction in hours (Qualifying Event) does not have to have been involuntary.
- Persons whose employment was terminated for gross misconduct are not eligible for the subsidy.
- Assistance Eligible Individuals (AEIs) who have individual coverage, either obtained through a health insurance marketplace or Medicaid, are eligible for subsidized coverage. However, those who elect to enroll in COBRA continuation coverage with premium assistance will no longer be eligible for a premium tax credit, advance payments of the premium tax credit, or the health insurance tax credit for their health coverage during that period.
- The amount of the subsidy includes any administrative fees associated with the COBRA premium.
- AEIs that misrepresent their eligibility for other coverages may be subject to fines, the greater of $250 or 110% of the premium subsidy.
The complete FAQ guidance, model notices, and other information can be found at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy.
Links
- FAQS: COBRA Premium Assistance under the American Rescue Plan Act of 2021 FAQs
- Model General Notice and COBRA Continuation Coverage Election Notice: MS Word | PDF
- Model Notice in Connection with Extended Election Period: MS Word | PDF
- Model Alternative Notice: MS Word | PDF
- Model Notice of Expiration of Premium Assistance: MS Word | PDF
- Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021: MS Word | PDF
Featured News & Insights
As 2025 comes to a close, many organizations are planning celebrations to recognize the milestones they have reached this year. When organizations host end of year celebrations, they are providing an...
As a mid-size or growing employer, you may be challenged to balance competitive benefits offerings at a reasonable cost in a compliant manner. The IRS regulations around Affordable Care Act (ACA) ...
On October 11, 2025, Governor Gavin Newsom signed into law SB 41, enacting a broad set of changes to the ways in which pharmacy benefit managers (PBMs) can do business in the State of California....