{"id":12164,"date":"2021-04-08T10:31:43","date_gmt":"2021-04-08T08:31:43","guid":{"rendered":"https:\/\/labre.nl\/?p=12164"},"modified":"2021-04-08T11:32:15","modified_gmt":"2021-04-08T09:32:15","slug":"usa-arpa-requires-employers-to-pay-100-of-cobra-for-certain-employees","status":"publish","type":"post","link":"https:\/\/labre.nl\/en\/2021\/04\/08\/usa-arpa-requires-employers-to-pay-100-of-cobra-for-certain-employees\/","title":{"rendered":"USA: ARPA Requires Employers to Pay 100% of COBRA for Certain Employees"},"content":{"rendered":"\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>As part of the American Rescue Plan Act of 2021 (&ldquo;ARPA&rdquo;), signed into law on March 11, 2021, beginning <span style=\"color: #f18101\"><strong>April 1, 2021<\/strong><\/span> employers will be required to pay 100% of the COBRA continuation premium for group health plan coverage for certain employees and their qualified beneficiaries for up to six (6) months.<\/p>\n<p><span style=\"text-decoration: underline;color: #f18101\"><strong>Who Qualifies for The COBRA Continuation Premium?<\/strong><\/span><\/p>\n<p>Section 9501(a)(3) of the ARPA provides that if an employee is:<\/p>\n<ul>\n<li>(i) terminated for any reason (except due to employee&rsquo;s gross misconduct) or<\/li>\n<li>(ii) has a reduction of hours,<\/li>\n<\/ul>\n<p>if the employee is already enrolled in COBRA Coverage on April 1, 2021 or enrolls in COBRA coverage between April 1, 2021 and September 30, 2021 (the &ldquo;Special Enrollment Period&rdquo;), the employee is eligible for the subsidy.<\/p>\n<p>The ARPA also allows a second chance for employees to enroll within 60 days of receiving notice of the Special Enrollment Period, even if the employee did not formerly make a COBRA election or previously dropped COBRA, so long as their COBRA eligibility period falls within the Special Enrollment Period.<\/p>\n<p><span style=\"color: #f18101\"><strong><span style=\"text-decoration: underline\">Who Does NOT Qualify for The COBRA Continuation Premium?<\/span><\/strong><\/span><\/p>\n<ol>\n<li>Employees who voluntarily terminate their employment are not eligible for the subsidy, although they may be eligible for COBRA continuation coverage at their own cost.<\/li>\n<li>Employees who are terminated due their own gross misconduct. Gross misconduct is not defined in the ARPA or the COBRA Act, but the following actions are examples of what may be considered gross misconduct:<\/li>\n<\/ol>\n<ul>\n<li>Fighting, physical assault, abuse, or threatening behavior,<\/li>\n<li>Blatant disregard for the safety of others or serious breaches of health and safety rules,<\/li>\n<li>Deliberate acts of vandalism or sabotage,<\/li>\n<li>Any attempts to financially defraud the company or theft,<\/li>\n<li>Significant levels of insubordination,<\/li>\n<li>Dishonesty, falsification of documents, or other forms of misrepresentation,<\/li>\n<li>Offensive or unlawful behavior (such as discrimination, harassment, or bullying), and<\/li>\n<li>Working under the influence of illegal drugs or alcohol.<\/li>\n<\/ul>\n<p><span style=\"color: #f18101\"><strong><span style=\"text-decoration: underline\">What Does This Mean for Employers?<\/span><\/strong><\/span><\/p>\n<p>Employers will obtain the subsidy, to be passed along to COBRA enrollees, through a payroll tax credit against employers&rsquo; quarterly taxes. The subsidy is non-taxable to the employee. This means that the employer will be required to pay the cost of the employee&rsquo;s COBRA premium and then claim the amount as a credit against its quarterly Medicare payroll tax.<\/p>\n<p><span style=\"color: #f18101\"><strong><span style=\"text-decoration: underline\">A Closer Look at the COBRA subsidy&hellip;<\/span><\/strong><\/span><\/p>\n<ul>\n<li>Since the law is not clear regarding the gross misconduct exception listed above, if an employer seeks to terminate an employee and deny COBRA coverage based on this exception, it will be critical to expressly state (preferably in the employee handbook or some other writing) what exactly constitutes gross misconduct and ensure that appropriate records of the employee&rsquo;s conduct are kept throughout the process.<\/li>\n<li>The ARPA does not extend the normal 18-month period of COBRA coverage that applies when coverage is lost due to job loss or reduction in hours.<\/li>\n<li>To explore this COBRA subsidy further, please see the links below:<\/li>\n<\/ul>\n<ol>\n<li><a href=\"https:\/\/www.congress.gov\/bill\/117th-congress\/house-bill\/1319\/text#toc-H55813B8A4A2D47EC85BD8BFC1A223FD7\">ARPA 2021 &ndash; Section 9501(a)(3)<\/a><\/li>\n<li><a href=\"https:\/\/www.govinfo.gov\/content\/pkg\/COMPS-896\/pdf\/COMPS-896.pdf\">Section 603(2) of the Employee Retirement Income Security Act of 1974<\/a><\/li>\n<li><a href=\"https:\/\/uscode.house.gov\/view.xhtml?req=(title:26%20section:4980B%20edition:prelim)\">Section 4980B(f)(3)(B) of the Internal Revenue Code of 1986<\/a><\/li>\n<li><a href=\"https:\/\/www.govinfo.gov\/content\/pkg\/COMPS-8792\/pdf\/COMPS-8792.pdf\">Section 2203(2) of the Public Health Service Act<\/a><\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><em><strong>For further information, please contact:<\/strong><\/em><\/p>\n<p><strong><span style=\"color: #f18101\">Amie Flowers Carmack<\/span><\/strong>, Partner<\/p>\n<p>Morningstar Law Group,&nbsp;Raleigh<\/p>\n<p><span style=\"color: #f18101\">e:&nbsp;acarmack@morningstarlawgroup.com<\/span><\/p>\n<p>t:&nbsp; +1 919 590 0394<\/p>\n<p>&nbsp;<\/p>\n<p>#WLNadvocate #Raleigh #EmploymentLaw #Morningstar<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; &nbsp; As part of the American Rescue Plan Act of 2021 (&ldquo;ARPA&rdquo;), signed into law on March 11, 2021, beginning April 1, 2021 employers will be required to pay 100% of the COBRA continuation premium for group health plan coverage for certain employees and their qualified beneficiaries for up to six (6) months. Who&#8230;<\/p>\n","protected":false},"author":3,"featured_media":12166,"comment_status":"close","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_ppma_block_editor_authors":""},"categories":[48],"tags":[],"ppma_author":[68],"class_list":["post-12164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-warwick-legal-network-2"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>USA: ARPA Requires Employers to Pay 100% of COBRA for Certain Employees &#183; Labr\u00e9 advocaten<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/warwicklegal.com\/news\/426\/usa-arpa-requires-employers-to-pay-100-of-cobra-for-certain-employees\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"USA: ARPA Requires Employers to Pay 100% of COBRA for Certain Employees &#183; Labr\u00e9 advocaten\" \/>\n<meta property=\"og:description\" content=\"&nbsp; &nbsp; As part of the American Rescue Plan Act of 2021 (&ldquo;ARPA&rdquo;), signed into law on March 11, 2021, beginning April 1, 2021 employers will be required to pay 100% of the COBRA continuation premium for group health plan coverage for certain employees and their qualified beneficiaries for up to six (6) months. 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