California Labor &
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New DOL Guidance for COBRA Premium Assistance Under ARPA
Apr 8, 2021

New DOL Guidance for COBRA Premium Assistance Under ARPA

Topics: COVID-19, Employee Benefits

On April 7, 2021, the Department of Labor (DOL) created a new webpage to provide guidance related to an employer’s obligations to comply with the mandated COBRA premium assistance under The American Rescue Plan Act of 2021’s (ARPA).

Now, ARPA requires employers to advance premiums for temporary COBRA coverage for “Assistance Eligible Individuals” (AEI).  An AEI qualifies if their employment was terminated or hours reduced to trigger COBRA.  AEIs terminated in the 18 months prior to April 1, 2021 will be eligible even if they did not previously elect COBRA coverage or if they elected COBRA coverage but discontinued it.  The premium assistance is available from April 1, 2021 through September 30, 2021 and means that the premium will be paid by the employer (or the plan) and reimbursed to the employer through a credit against payroll taxes.

In addition, employers must give notice of the COBRA Premium Assistance.  The DOL has created model notices that may be a starting point for employers or plans.  The DOL’s FAQs For Employers may also be helpful. 

Nonetheless, employers should confer with their counsel on how best to comply with The American Rescue Plan Act of 2021 and with their accountants to ensure proper tax credits.

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For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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Sacramento Office Managing Partner and Chair of CDF’s Traditional Labor Law Practice Group. Mark has been practicing labor and employment law in California for thirty years. His practice has a special emphasis on the representation of California employers in union-management relations and handling federal and state court litigation and administrative matters triggered by all types of employment-related disputes. He is also adept at providing creative and practical legal advice to help minimize the risks inherent in employing workers in California. He recently named “Sacramento Lawyer of the Year” in Employment Law-Management for 2021 by Best Lawyers®.
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