Section 9501 of the American Rescue Plan Act, 2021 (“ARPA”) provides for a complete COBRA premium subsidy for all Assistance Eligible Individuals beginning on April 1, 2021, and ending on September 30, 2021. This article discusses who qualifies as an Assistance Eligible Individual, the impact of the relief on such individuals, the impact of the relief on the COBRA maximum coverage period, the additional requirements imposed on employers in connection with the relief, and how employers may receive reimbursements for the subsidy from the federal government.

Continue Reading Special Mandatory COBRA Subsidy in 2021 for Involuntarily Terminated Employees

Consider a situation in which a former employee alleges that he or she did not receive a COBRA election notice. That’s the notice that must be provided to group health plan participants when they lose coverage as a result of certain events, including termination of employment, and that gives the participants information regarding their rights and obligations to elect COBRA continuation coverage. If a court finds that the employer failed to provide the notice, the court could (1) allow the employee to retroactively elect coverage after the election period otherwise would have ended, (2) award statutory penalties of up to $110 per day to the employee, or (3) provide other relief to the employee. There is also an excise tax for COBRA failures, including failure to provide a COBRA election notice, of $100 per day per failure. An employer must report the excise tax on Form 8928, and the statute of limitations generally would not start running unless and until the employer does so.

To prevail at the summary judgment stage and avoid a trial, some courts hold that the plan administrator has the burden of proving that the election notice was properly sent to the employee. So, what evidence does the plan administrator need to establish that the notice was sent? According to a recent decision, a declaration of the employer’s normal business practices may not be enough to win a motion for summary judgment.


Continue Reading Benefit Plan Record Retention – A Cautionary Tale from Louisiana