DOL publishes guidance on COBRA premium assistance under ARP

The American Rescue Plan (ARP) includes premium assistance for people who continue their health insurance coverage via COBRA. The Department of Labor (DOL) recently published guidance on the COBRA premium subsidy. 

Not official use.

Who's eligible? People who qualify for COBRA due to a reduction in hours or an involuntary termination (unless the termination was for "gross misconduct"). But, the subsidy excludes people who are "eligible for other group coverage, such as through a new employer's plan or a spouse's plan . . . or if [they] are eligible for Medicare." 

The premium assistance generally runs from April 1, 2021 to September 30, 2021. The employer or plan is "entitled to a tax credit for the amount of the premium assistance." The guidance also includes some Model Notices, which is helpful. Check out the full guidance for additional information and answers to more questions. 

COVID-19 Guidance for Employee Benefit Plans

DOL issued new COVID-19 Guidance for Employee Benefit Plans. The guidance includes a few helpful documents:

• Extension of Certain Timeframes for Employee Benefit Plans, Participants, andBeneficiaries Affected by the COVID-19 Outbreak;
• EBSA Disaster Relief Notice 2020-01; and
• Frequently Asked Questions.

Unfortunately, benefits plans issues are always complicated. Take, for example, this question that both employers and employees have been struggling with:

Q1: If my place of employment temporarily closes because of the COVID-19 outbreak, am I still covered by my employer's group health plan?

What's the answer?

As long as the employer exists, continues to sponsor a health plan, and employs you, and you continue to meet your employer's eligibility requirements, you would generally remain covered under your existing health plan, even if the employer's physical location closes

This just raises more questions. Are employees who are laid off during the quarantine still "employed?" What if they're on UC? What are the eligibility requirements? And on, and on. This guidance is a good start though.

Extensions Galore - UC and COBRA

COBRA subsidized premiums just keep getting extended. First, Congress extended it to February 28, 2010. Last week, Obama signed another extension until March 31, 2010 (Temporary Extension Act of 2010 (.pdf)). Now, Business Insurance reports that Congress is poised to extend the COBRA subsidy through the end of the year.

What COBRA subsidy, you ask? Per the Department of Labor's COBRA web site:

"premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit....and lasts for up to 15 months."

COBRA's not the only unemployment assistance program that seems to keep going and going.

The Washington Post ran an article today, Are Unemployment Benefits No Longer Temporary? It addresses both sides of an ongoing debate over whether the unemployment compensation extensions are too long. UC previously lasted about six months, but in response to the current downturn has been extended to 99 weeks in some states. The article reports that 11.4 million people are collecting UC at a cost of $10 billion a month.

The article is worth a read in its entirety, but in short - Detractors argue UC is becoming a new entitlement program, acting as a disincentive to search for work, and costing more than we can afford. Supporters argue it's necessary for those who have lost their jobs, reasonable given the lack of available jobs, and some people put money in for years, now they need it.

Image: Photograph (taken by me) of the State College, Pennsylvania CareerLink. Among other things, it's where Unemployment Compensation referee hearings are held.

Posted by Philip Miles, an employment lawyer with McQuaide Blasko in State College, Pennsylvania.