Keeping Up with COBRA in 2022

Is your HR Department, brokerage firm, or small business burned out on ARP COBRA extension compliance? Exhausted from the constant ARP (American Rescue Plan) compliance conundrum? In this post, we’ve broken down the ARP’s extensions of COBRA timelines to help simplify COBRA compliance in 2022.

SO MANY NOTICES (and what to do about those)…
Throughout 2020 and 2021 the IRS released Notice after Notice with guidance updates for employers regarding the COVID-19 National State of Emergency and it’s impact on COBRA administration. With each passing guidance release, new requirements came to light, which ultimately resulted in carriers, employers, Plan Administrators re-evaluating their approach to COBRA on a national level. IRS Notice 2021-58 was the most detailed release specific guidance on the extensions of COBRA.
In a nutshell, the IRS’s further guidance release, describes scenarios for circumstances under which COBRA timelines for premium payment due dates, notification deadlines, and COBRA election periods had been extended for many COBRA qualified individuals. Individuals who are considered within the “outbreak period” may be entitled to such extensions and lengthened payment periods.
Breaking down the “Outbreak Period”…
The “Outbreak Period” simply put, applies to individuals (qualified beneficiaries) who became eligible for COBRA in February 2020 and beyond, throughout the National State of Emergency. (Presently, we are still in “National State of Emergency”.)
Qualified Beneficiaries in these circumstances are allowed extra time to elect and to pay COBRA premiums, and Plans are allowed extra time to notify individuals of their COBRA election rights.
For qualified beneficiaries who elect COBRA but pay late, employers must determine when the person elected, whether or not this beneficiary falls within the outbreak period, and ultimately, whether or not the individual may have an extended time-frame for payment.
Give it a year…and 105 days.
In the examples below, we simplify the extension period specific to initial payment and ongoing premium payment.

• If an individual elected COBRA continuation coverage more than 60 days after receipt of the COBRA election notice, that individual generally will have one year and 105 days after the date COBRA notice was provided1 to make the initial COBRA premium payment.

 
Ex A. Donna is enrolled in COBRA and elected and paid within the standard 60 day election period, and 45 day payment period back in February of 2020. Donna has always sent in her payments within the standard COBRA time-frames but in October of 2021, she inadvertently missed a payment while she was traveling.
In this scenario, Donna is allowed an extended time frame to pay her COBRA premiums:

• Donna elected COBRA within 60 days of receiving the election notice;
• Donna's 45-day initial payment period fell after 02/29/20 (onset of COVID19 outbreak period);
• The Outbreak Period applies here based on above details, so each subsequent premium is due "one year from the date the payment originally would have been due in the absence of the Emergency Relief Notices, including the mandatory 30-day grace period" (under Notice 2021-58)

Summary/Response: Donna may remit her October premium later than usual due to extension of regular COBRA time-frames. Donna should be informed that the Outbreak Period and National State of Emergency may end at any time so she would eventually become responsible for the full balance any potential "delayed" retro-premiums when this happens.
 
Ex B. Jeri elected COBRA more than 60 days after the receipt of the COBRA election notice and Jeri's original COBRA election was due on or after 03/01/2020 according to regular COBRA time-frames. How long does Jeri have to make her initial premium payment?
According to the latest guidance, "generally" an individual such as Jeri, will have one year and 105 days after the date the COBRA Notice was provided to make the initial premium payment.
How long will Jeri have to make any subsequent premium payments after the initial premium payment? One year and 30 days from due date.
 
Give it a year…and 45 days:

• If an individual elected COBRA continuation coverage within 60 days of receipt of the COBRA election notice, that individual will have one year and 45 days after the date of the COBRA election to make the initial COBRA premium payment.

 
Ex C. Tom elected COBRA continuation coverage within 60 days of receipt of the COBRA election notice. How long does Tom have to make his initial premium payment?
According to the latest guidance, Tom is allowed one year and 45 days after the date of the COBRA election to make the initial COBRA premium payment.
How long will Tom have to make any subsequent premium payments after the initial premium payment? One year and 45 days from due date.
 
COBRA Relief and the The Joint Notice provided extensions for the following COBRA timeframes:
(1) The 60-day election period for COBRA continuation coverage
(2) The dates for making COBRA premium payments
(3) The date for individuals to notify the plan of a qualifying event or determination of disability and
(4) The date for providing a COBRA election notice for group health plans and their sponsors and administrators.
 
When Does It End?
On February 18, 2022, President Biden again extended the COVID-19 National Emergency, which was set to expire on March 1, 2022. The most recent extension means that the deadlines described earlier continue to be tolled for one year (or, if earlier, 60 days from the end of the National Emergency).
The Emergency Relief Notices continue to apply to payments of COBRA premiums after the end of the ARP COBRA premium assistance period, to the extent that the individual is still eligible for COBRA continuation coverage and the Outbreak Period has not ended. For individuals electing COBRA, they may still elect COBRA within the time-frames described earlier, because the Outbreak Period has not ended. At this point, we have no idea when the Outbreak Period will end, but we do have a better understanding of when COBRA premiums are due.
Want to skip the extension confusion altogether?
We are here for you! CobraHelp stood out nationally throughout the ARP. As the first third-party administrator in the country to have the premium subsidy implemented and notifications mailed well before the May 31st deadline in 2021, we know a thing or two about efficiency, and dedication to our trade. Throughout the COBRA’s evolution over 35 years we’ve continued to shine for two primary reasons:

1. We’re 100% focused on helping employers and brokers with COBRA administration and have been focused COBRA Experts since the very beginning in 1986. We don’t dabble in other areas like HRA and Payroll administration, which allows us to completely devote our services, resources, and our expert team to you during these unprecedented times.
2. Our unique model is a well-kept industry secret, and this allows us to provide a personable, tailored experience to employers and brokerages of all shapes and sizes. No call centers, no recordings. Just people helping people with the challenges of business in a brave new world.

Join forces with the CobraHelp team, and be rid of the bothersome details of COBRA administration today!

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