The Required Notices
Under the new law, employers subject to COBRA are required to provide written notice to individuals who may qualify for the COBRA Premium Assistance. These individuals include any COBRA Qualified Beneficiaries who experienced an involuntary loss of coverage due to a termination of employment or reduction of hours effective any time on or after November 1, 2019. For certain groups, this will include terminations that occurred during October 2019 as well. The required notices must be provided to the designated individuals no later than May 31, 2021.
Admin America intends to begin providing these notices on behalf of our COBRA clients during the last two weeks of April. Our intention is to provide the notice to all Qualified Beneficiaries who experienced a termination of employment or reduction of hours related loss of coverage during the applicable period regardless of whether the event may have been previously labeled as voluntary or involuntary. Because the non-compliance penalty for failure to send the required notice is so high ($100 per day per letter), we are choosing to err on the side of caution with regards to notice delivery. We have observed too many instances recently of employers mislabeling involuntary terminations as voluntary and we want to avoid employers being assessed penalties for failure to send a notice to an individual whose termination is mislabeled in that way.
Admin America currently expects the Department of Labor to release the model language for the required notice no later than April 10. The software developer of our COBRA administrative platform has committed to providing all necessary system updates (including incorporating the model language into the system’s letter templates) on Saturday April 17. Based on that, it is Admin America’s intention to begin processing the required notices out to Qualified Beneficiaries through our mailing fulfillment service on Monday April 19. We expect that this process will be complete no later than Friday April 30.
Admin America will invoice brokers who pay for a client’s monthly COBRA administrative fees $2.00 per notice for providing the additional notices required under ARPA to any Qualified Beneficiary to whom Admin America has previously provided a COBRA Election Letter. Admin America will not charge a per notice fee for Qualified Beneficiaries who are provided the required notice as part of their original COBRA Election Letter. This generally will apply to Qualified Beneficiaries whose Qualifying Event occurred after President Biden’s signing of ARPA on March 11. Admin America has intentionally delayed sending those individual’s COBRA Election Letters to avoid unnecessary duplicate letters and the corresponding expense for our clients. Agents / Brokers wishing to provide the required notices on their own (or have the employer client provide the notices directly) to avoid the corresponding $2.00 per notice fee may complete an online opt-out form here. Opt-out forms must be completed no later than Friday April 16. Separate opt-out forms must be completed for each client that Admin America will not be sending notices on behalf of.
Important note applicable to clients which are not opted-out of Admin America’s provision of notices to their Qualified Beneficiaries. No action need be taken for clients who commenced monthly COBRA administration services with Admin America on or before October 1, 2019 for notices to be delivered to all applicable Qualified Beneficiaries. Admin America will have all of the necessary historical data to provide the required notices. The only exception to this would be if the agent /broker or client has any address updates to provide to Admin America. Address updates for a specific Qualified Beneficiary can be submitted directly through the Employer Portal of Admin America’s COBRA software.
Alternatively, clients who commenced monthly COBRA administration services after November 1, 2019 may have Qualified Beneficiaries who require supplemental notices but for whom Admin America does not have historical data needed to provide the notices. For those clients, a data template is available to provide Admin America with information about any Qualified Beneficiaries who experienced Qualifying Events prior to Admin America’s commencement of monthly administrative services. Admin America will charge $6.00 per notice for these individuals. The data template for this purpose may be requested by completing the online form found here.