Section 9501 of the American Rescue Plan Act of 2021 (the “ARPA”) requires certain employers to offer free COBRA coverage to certain individuals between April 1, 2021 and September 30, 2021. The ARPA provides tax credits to employers to offset the cost of the COBRA coverage. The right to free COBRA coverage extends to some individuals whose right to COBRA coverage previously ended.
The original version of this blogpost, written shortly after passage of the ARPA, reviewed eligibility free coverage and extended coverage, how the tax credits work, and potential issues pertaining to insurance coverages. On April 7, 2021, the Department of Labor (the “DOL”) issued guidance on the law in the form of “Frequently Asked Questions” and various model notices that can be used in connection with the law. This post reflects the DOL’s recent guidance.