The past month has been one of those (rare) months I question why I started this business. We anticipated a COBRA Notification tsunami was on the horizon. We geared up to handle the onslaught of mailings and questions. Last month’s blog detailed what we knew so far about the ARPA/COBRA subsidy and we were waiting on the DOL to provide sample notices. Earlier this month they released them and their “guidance.” They gave a deadline to have the Notices issued: May 31, 2021.
We were ready to go, but we needed our software provider to populate their system to allow us to get the notices out and they were stalling. I admit, I got a little testy with them. I told them that I’ve already been through the 2009 ARRA mess. I took time to compare the old 2009 subsidy notices with the new 2021 DOL model notices and I didn’t see a huge difference. But, their outside counsel – and other attorneys I trust – begged to differ with me. The devil being in the details.
Among the open questions regarding the notices that they are waiting on Treasury and DOL to offer clarification are some of the finer points that the current guidance does not address such as:
- What is an involuntary termination of employment? While we have some guidance from ARRA in 2009, we are waiting for confirmation that the guidance is equally applicable to ARPA. Also will there be any guidance specific to COVID-19 and the refusal to return from furlough as being an involuntary termination of employment?
- Can you (or should you) have automatic enrollment or negative enrollment into the subsidy, particularly for those already on COBRA if you know they had an involuntary termination of employment or a reduction in hours — but subject to them coming forward with information on disqualifying coverage?
- Can you rely on an Assistance Eligible Individual (AEI) attestation that they are eligible for the subsidy? What if you suspect they are not an AEI?
- How does the disability extension or second qualifying event interact with the eligibility of the subsidy? If the involuntary termination was more than 18 months ago but a second qualifying event or disability extension would have extended COBRA coverage past April 1, 2021 am I covered?
- How does unsubsidized COBRA coverage work after September 30, 2021? Am I entitled to unsubsidized coverage even if I am not current on COBRA payments back to my qualifying event? Or do the Outbreak Period rules apply and I have to be current for all periods before the subsidy began to continue unsubsidized COBRA coverage after the subsidy?
COBRA is always complicated. But these unanswered questions are causing many trusted benefits attorneys to counsel that no action should be taken until more clarification is issued. So, given this guidance, our software provider promises to make us armed and ready by May 13th. We plan on mailing a bazillion ARPA Subsidy notices by the May 31st deadline. If you are a COBRA client of ours and have not returned the PDF or spreadsheet data (emailed to you in mid-March), please wrap up that project and email it to us with the names of the Assistance Eligible Individuals so we are ready to send those notices for you.
In the meantime, we are working with our software provider to prepare as much as we can to be ready when we have the answers we so definitely need. The tsunami is still looming, it’s just holding offshore for now.