Employers Must Find, Tell Laid-Off Workers About Health Subsidies

As Bloomberg Law reports, under the American Rescue Plan Act (ARPA) signed into law by President Joe Biden earlier this year, employers must identify and notify laid-off employees who qualify for free health-care coverage under the legislation.

The ARPA also requires employers to cover 100 percent of an employee’s cost of continuing group health coverage under COBRA if the employee was eligible for COBRA continuation coverage during the indicated period regardless of whether the employee may not have previously elected coverage or discontinued coverage. The coverage must extend from April 1, 2021 through September 31, 2021.

Employers that provide such paid coverage may recover the cost through deductions on quarterly payroll filings.

Employers must provide notices about the COBRA subsidies by May 31, 2021 for people who were first eligible to elect the coverage as far back as October 2019 — even if the individuals didn’t choose the COBRA coverage at the time, or later dropped it.

The U.S. Department of Labor (DOL) has issued guidance that includes model notices that can be used by employers. Read that guidance here. The DOL also has issued FAQs that address eligibility, applications for premium assistance, and details of the notice requirements.

The Internal Revenue Service is expected to issue guidance soon that will help employers identify who is eligible for the subsidies. Stay tuned to Connecting the Dots for more information as it becomes available.

Littler has more information on this issue here.