"Employers that pay for a terminated employee's COBRA premiums as part of a severance program should understand that in most cases, during the next six months, this will no longer be a benefit which can serve as adequate consideration for a release of claims.... Employers should review recent and current severance and separation issues and implement [certain] changes."

"These model documents include an ARP General Notice, a Notice in Connection with Extended Election Periods, an Alternative Notice, and a Notice of Expiration of Period of Premium Assistance.... [T]he Department also developed a Summary of ARP requirements to include the following supplemental disclosures, which should be included with the ARP General Notice, the Alternative Notice, and the Notice in Connection with Extended Election Periods: [1] A summary of the ARP's premium assistance provisions. [2] A form to request the premium assistance under the ARP. [3] A form for an individual to use to satisfy the ARP's requirement to notify the plan (or issuer) that the individual is eligible for other group health plan coverage (other than coverage consisting of only excepted benefits, coverage under a health FSA, or coverage under a QSEHRA) or that the individual is eligible for Medicare.

'Each model notice is designed for a particular group of qualified beneficiaries. When provided in combination with these supplemental disclosures, these model documents contain all of the information needed to satisfy the content requirements for the ARP's notice provisions."

"[1] You should notify affected individuals of the one-year COBRA extension ... [2] For those [who lost] coverage between April 1, 2021 [and] September 30, 2021, you need to give them a notice regarding the free COBRA ... [3] You need to send a notice by May 31, 2021 to qualifying individuals who had a COBRA event before April 1, 2021 -- including expired COBRA participants ... [4] Free COBRA reimbursed directly to the employer ... [5] No one-year extension of deadline to elect free COBRA."

"The guidance does not specifically address the deadline to send updated COBRA election notices describing the subsidies for individuals with qualifying events on or after April 1, 2021 ... The election of subsidized COBRA coverage does not cut off an individual's pre-existing COBRA election right if it was extended under the Joint Relief and EBSA Disaster Relief Notice 2021-01."

"[T]he FAQs offer no specific guidance on the coordination of the COBRA subsidy with severance plans ... Similarly, the guidance is silent as to what constitutes an involuntary termination of employment."

"For multiemployer plans, ARPA provides for direct financial assistance without a repayment obligation. It also provides opportunities to extend funding zone status, retain funding improvement and rehabilitation plans, and modify existing liability amortization requirements. For single-employer plans, ARPA also provides some limited funding relief."

"One of the most important questions answered by the new FAQs helped address how the subsidy interacts with the previous guidance providing extensions to elect COBRA or pay for COBRA coverage.... The FAQs further clarified that the subsidy election period does not cut off an individual's pre-existing right to elect COBRA continuation coverage, including under the extended time frames provided under the Joint Notice and [EBSA Disaster Relief Notice 2021-01]."

"While this guidance answers important questions on the administration of the subsidies, it does not ... cover important nuances such as what is an 'involuntary termination' in order to qualify for subsidized coverage, how existing separation agreement commitments to subsidize COBRA should be viewed, or details on how the corresponding payroll tax credit will work."

"While the Model Notices are available, they are not mandated and can be modified. There may be good reasons for an employer to consider modifying the notices. If an employer chooses to draft their own forms or modify the model forms, the FAQs specify what information must be included in the notices."

"[T]he DOL clarified that the COVID relief on timing of providing notices under EBSA Disaster Relief Notice 2021-01 does not apply to the notice and election periods related to the COBRA subsidy of ARPA.... [U]ltimately the penalties for non-compliance are on you as the plan sponsor even if you are using a third-party COBRA administrator."

• Model General Notice and COBRA Continuation Coverage Election Notice: MS Word and PDF
• Model Notice in Connection with Extended Election Period: MS Word and PDF
• Model Alternative Notice: MS Word and PDF
• Model Notice of Expiration of Premium Assistance: MS Word and PDF
• Summary of COBRA Premium Assistance Provisions under the American Rescue Plan Act of 2021: MS Word and PDF

10 pages. "Set out [in this document are 21 Frequently Asked Questions (FAQs)] regarding implementation of certain provisions of [ARPA], as it applies to [COBRA].... [T]hese FAQs answer questions from stakeholders to help individuals understand the law and benefit from it, as intended. The Department of the Treasury and the [IRS] have reviewed these FAQs, and, concur in the application of the laws under their jurisdiction as set forth in these FAQs."

"Does the subsidy only apply to somebody who was terminated or had hours reduced due to COVID-19? ... Does the subsidy apply to an involuntary termination even if the termination was for 'cause' for a clear performance issue? ... Is an employee who loses coverage after a certain number of months on disability or leave of absence, or due to termination after a period of disability or leave, eligible for the subsidy?"

"The addition of the five highest paid employees ... appears to be applicable on an annual basis. Stated another way, only the traditional five covered employees (CEO, CFO, and three highest paid officers) remain covered employees in all future years."

"Last August, IRS issued Notice 2020-60 on the SECURE Act's community newspaper relief. That guidance apparently still applies to the modified relief, with one possible exception -- whether elections to use the relaxed funding rules apply to all plans in a community newspaper's controlled group."

"On March 17, 2021, the Multiemployer Plans Committee of the American Academy of Actuaries met with representatives from PBGC, the Department of the Treasury, and the [DOL] to share the committee's initial observations regarding the multiemployer pension provisions under ARPA, with a focus on areas where clarification may be needed.... The list of topics discussed ... is included [in this article]."

"[N]ot all eligible [multiemployer] plans will be approved, and the PBGC will prioritize applicants by needs. Eligible multiemployer plans must meet one of ... four qualifying requirements ... The single-employer funding relief extends interest rate stabilization and funding shortfall amortization periods, both of which reduce minimum required contribution amounts in the near-term."

"There may eventually be [multiemployer plan] reforms, but with a big cash injection into Central States Teamsters, the reckoning day has been pushed off. The real crisis was Central States Teamsters going under. It would have taken down the PBGC.... Unfunded liability of Central States Teamsters: ... $43.6 billion dollars ... a little over 50% of the estimated $86 billion cost of the MEP bailout."

"Following passage of CAA21, it dawned on Congress that dependent care FSA balances in 2021 would be very, very high, and come tax time in April 2022, employees would be in for quite a shock when they realized that they would have to pay income tax on upwards of $5,000 in dependent care expenses they thought would be tax-free.... ARPA was designed to solve a problem caused by CAA21; it was not designed to expand dependent care FSA benefits."

"[I]ndividuals making an election will have an opportunity to elect COBRA coverage on a retroactive basis (back to their loss of coverage) or on a prospective basis (starting April 1, 2021) ... While the COBRA subsidy is available for state law continuation coverage ... the special second election period ... may be limited to periods of continuation coverage provided under federal COBRA."

"AEIs who elect COBRA during this special election period will begin COBRA coverage on April 1, 2021, but if the COBRA event occurred before this date, the coverage will still end 18 months from the date they originally became eligible for COBRA.... [To] take advantage of the subsidy, they must make their COBRA elections within the special election period."

"EPPRA restores financial health to ... about 15% of all multiemployer plans.... This one-time payment does not need to be paid back; however, some strings are attached such as investment guidelines on the cash infusion.... Single Employer Plans struggling to make the minimum required contributions will find two provisions of the new law that will greatly reduce their contribution burden."

"This [report] provides an overview of the tax credits for paid leave initially provided in the [FFCRA] and later extended in the COVID-related Tax Relief Act of 2020, enacted as Division N, Title II, Subtitle B of the Consolidated Appropriations Act, 2021 (P.L. 116-260) and the American Rescue Plan Act[.]" [IF11739, Apr. 1, 2021]

"The ARPA subsidy also applies to fully insured group health plans that are not subject to COBRA (e.g., because the employer typically employs fewer than 20 full-time employees), but which are subject to state continuation laws. For those plans, the insurer must provide the subsidy and is entitled to claim the tax credit."

"The ARPA [1] increases the qualifying reasons for EPSL to nine ... [2] resets an employee's available EPSL days as of April 1, 2021.... [3] extends the EFMLA qualifying reasons to all nine of the EPSL reasons[.]"