Sup Gang,

So if you live in New York, you are fully aware of the damage the Scamdemic has caused. As a result of poor government policies, that are really just looking to keep you in a continued state of fear, to control your lives and to ensure that you are depersonalized and demoralized, one of the many negative effects has been the detrimental impact on the City’s employment rate.  With an unemployment rate at almost 13% as of January 2021, with countless businesses being forced out of commission, and with many large employers leaving the state, it is not to uncommon for those who once had cushy jobs to now find themselves unemployed.

Being separated from employment is known as the “death penalty” of employment law. Certainly, getting canned from your job might as well be a death sentence—a slow one at that.  Having less interaction with peers, having less money, suffering the psychological trauma of not being productive, certainly it is a slow decay. It is as if not being able to work and not having the ability to produce is almost the very definition of uselessness.

One of the most intimidating things about losing your job is losing your health coverage.  Let’s face it—health insurance is a big deal.  In a world riddled in fear, that constantly tells you that you are going to die daily from all sorts of viruses and diseases that you cannot avoid, not having health insurance is akin to the Spartan’s not bringing their shields to the Battle of Thermopylae (think of the movie 300 and the raining down arrows!).

Before we go down the rabbit hole of the Insurance in America debate—let’s just focus on one particular piece of relief that was originally introduced by the Families First Coronavirus Response Act of 2020 (“FFCRA”), and enhanced by the American Rescue Plan Act of 2021 (“ARPA”)—and that relief is the COBRA subsidy—which provides relief for those separated from employment through 9/30/2021.

American Rescue Plan Act of 2021.

On 2/24/2021, House Member Rep. John A. Yarmuth of Kentucky introduced H.R. 1319, colloquially known as the American Rescue Plan Act of 2021 (“ARPA”), which was signed into law by President Biden on 3/11/2021.  The ARPA was sold to the public as a much needed third round of economic relief.  While the logic behind this is questionable, the purpose of this blog entry is not to bash the logic behind it (you know how I hate government), but rather, to discuss an important development and program that the ARPA offers.

Section 9501(a) discusses premium assistance for COBRA continuation coverage for individuals and their families.

In short, if you are (a) separated from employment between 4/1/2021 – 9/30/2021, (b) currently receiving COBRA benefits as of 4/1/21; or (c) have received COBRA benefits prior to 4/1/21, as they have expired, you are going to be eligible for COBRA benefits under this new programs.   Here are some specifics according to the policy text:

If you cannot see the image above, I will rewrite it here (plus this will help those who need screen readers):

  • Sec. 9501(a)(1)(A) tells us that the reduction in premiums are available from 4/1/2021 – 9/30/2021 for those who qualify under 9501(a)(3).
  • Sec.’s 9501(a)(3); 9501(a)(3)(A); and 9501(a)(3)(B) tell us that an “Eligible Individual” is one who is a qualified beneficiary that as of 4/1/21-9/30/21, is (a) eligible for COBRA coverage as a result of employment separation (except if they voluntarily terminate); and (b) elects such coverage.
  • Sec.’s 9501(a)(5)(A); 9501(a)(5)(A)(i); 9501(a)(5)(A)(i)(I); and 9501(a)(5)(A)(i)(II) tell us that unless employers provide notice to qualified beneficiaries, then the employers notice requirements under COBRA have not been met. In other words, employers are required to notify them in the same fashion that they would notify   anyone under COBRA.  Specifically, the Notice is to contain understandable and clear language of (a) the availability of premium assistance, and (b) the option to enroll in different coverage if the employer permits.
  • Sec. 9501(a)(5)(A)(iii) and 9501(a)(5)(D) advise that there is form language that will be available, and is required to be provided.

5.  Sec. 9501(a)(5)(A)(ii) tell us that us that if the eligible individual became entitled to elect COBRA continuation coverage before the 4/1/2021 enactment date, employers are required to provide the additional notification as discussed in (5)(A), within 60 days of enactment, and the failure to provide such notice shall be   treated as a failure to meet the notice requirements under COBRA.

Under the ARPA, employers are required to provide new model forms to the for employees who are eligible for COBRA between 4/1/2021 – 9/30/2021, and part of these forms will discuss that certain employees can have their COBRA premiums paid in full by a subsidy offered through the ARPA.  You are eligible if as of 4/1/21-9/30/21, you are (a) eligible for COBRA coverage as a result of employment separation (except if they voluntarily terminate); and (b) you have elected such coverage.  Basically, every one who is eligible for COBRA (minus those who voluntarily terminate) can received this subsidy.

Your employer is REQUIRED to provide you with this model notice, and if they don’t, they will not have met the notice requirements as standard under the COBRA program.

Note that if you were eligible for COBRA prior to the enactment date of 4/1/2021, you are likely still eligible for this program, and your employer would have to provide you notice within 60 days (i.e. by 6/1/2021).

Employers, before you think this will costs an endless amount of money that you would not be able to afford, just keep in mind that every dollar you spend here, you can deduct $1 for $1 on your Quarterly 941 submissions (payroll tax).  In other words, lets say you spend $100 on continuing premium for your former employee, Bob.  When you are filing your Quarterly 941, you would be able to write this amount on the form, report it as line 11a or 11b, and reduce your contribution in that amount.

If you recall, this was the same program that was implemented when the Trump Administration sighted into law the Families First Coronavirus Response Act (“FFCRA”).  While it didn’t get much media attention (much like anything positive he did during his presidency), it enabled people to write these sort of contributions off when filing the 941’s.   It was a big win for the employer since (a) it enabled you to do something good for the employees, (b) it enabled you to look like it is solely your money, and (c) it took away tax money from the government, which also stops them from wasteful spending, such as spending at least $518,000 to study how cocaine affects the sexual behavior of Japanese quails (not a joke!).

Moral of the story—if you are one of the unfortunate casualties of the Scamdemic, while it looks like this nightmare isn’t ending anytime soon, at least there is bit of help available (for a little while). Oh, and don’t be like that unfortunate guy in the cover image.  Not sure what is happening there but I am not feeling the outcome.

That’s all for today folks. A little sliver of light in this endless nightmare known as the Scamdemic. Hopefully this is helpful for those unfortunately.

Remember to always stay UNUSUALLY MOTIVATED.

Yours in love, law and lifts.