What admins need to know as the COBRA subsidy period ends

The passage of the American Rescue Plan Act (ARPA) in March of 2021 put a significant wrench in daily operations for COBRA administrators. This major piece of legislation included a 100% COBRA subsidy available for up to 6 months (April-September 2021). This subsidy applied not only to those with a COBRA qualifying event during the 6-month period, but also to those who were COBRA-eligible in 2020, even if they chose not to elect the coverage at the time. As a result, COBRA administrators faced the daunting task of enrolling or reprocessing claims for millions of Assistance Eligible Individuals (AEIs), a tremendously inefficient and costly process. [Watch our webinar that explores this topic in detail.]

After a grueling few months, COBRA administrators have one more ARPA requirement to fulfill: They must notify AEIs within 45 to 15 days before the end of the subsidy period. This, too, could prove taxing, as many systems remain inefficient at sorting data.

To identify who should be noticed about the end of the subsidy period, administrators have a few options:

  • Pull data/report across the employer book of business on any enrolled COBRA individuals with a subsidy ending on 9/30 or earlier.
  • Pull data on all participants who are paid through 9/30 and review each record to determine if the paid-through date is due to a subsidy applied to their premium.
  • Pull the attestation forms submitted by each participant and review each record to determine if they are enrolled and subsidized.

If the solution cannot automatically generate notifications to an identified group of participants across (or by) employer clients, administrators can instead download the name, address and actual subsidy end date (September 30 or earlier) to create letters manually or via a word processing mailmerge file. Administrators should retain copies of all notices mailed.

Additional note: Administrators must still provide this subsidy-end notice to AEIs whose COBRA coverage ended before Sept. 30, unless, at the time, they specifically provided a subsidy-end notice alongside a coverage-end notice.

The ability to gather data at a TPA-level across the entire employer/client population is critical to managing large-scale compliance or federal legislative changes. WealthCare COBRA has the functionality to gather, filter and export data at any level for any data points, including subsidies. Learn more about our solution.

About the author

Kris Saunders

Solution Engineer, Consumer Solutions

Kris Saunders has worked in the COBRA space for more than 30 years, including a role as vice president of operations for WageWorks during ten of those years. She currently works in consumer solutions for Alegeus. Kris is certified as a CFCI, CAS and SPHR.

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