Clarity ARPA Webinar Q&A

On Thursday, April 15, 2021 Clarity hosted a webinar on the American Rescue Plan Act (ARPA) of 2021. This act establishes a 100% COBRA premium subsidy for eligible COBRA participants. The subsidy began on April 1, 2021 and ends on September 30, 2021.

During this webinar, Darcy Hitesman, Employee Benefits law attorney, provided an in-depth overview of the ARPA and the COBRA continuation provision. A Clarity COBRA specialist also reviewed the simply smarter solution we are developing to allow you to easily approve the COBRA continuation of coverage for your eligible individuals.

In the chart below, you will find the frequently asked questions and corresponding answers.

Question Asked


Subsidy Eligibility


If someone was eligible for COBRA say February 1, 2021 and did not elect COBRA but now wants to enroll due to the subsidy, does the effective date go back to the COBRA eligibility date of February 1, 2021 or April 1, 2021 subsidy effective date?

April 1st

What if they are covered on an Individual plan?  Is the employee still eligible for the premium assistance?

Participants with individual coverage are not ineligible for premium assistance because of the individual coverage.

How would the employer know if the COBRA applicant qualifies for another coverage or Medicare?

The employer would not know this. Initial eligibility is determined through the Request to be Treated as AEI form. Thereafter, the participant is responsible for notifying the plan of eligibility for other group health plan coverage or Medicare; the participant notification form is used.

If an employee is termed due to a disability, are they eligible to receive the COBRA benefits at no cost?


Does the reduction of hours also have to be involuntary to be eligible?


If the employee voluntarily reduced their hours, are they an AEI?


How will employers know if a QB is eligible for other coverage?

The employer can only determine AEI status based on their reason for termination. If the individual was involuntarily terminated or had a reduction in hours, they are potentially eligible. 

Do you think they will open up the subsidy to coverage dependents?

All QBs and their covered dependents who have been involuntarily terminated or experienced reduced hours are eligible.

Does the subsidy apply to aged-out dependents?

If the dependent ages out as of 4/1 or greater, the second event is eligible for the subsidy as long as the QBs original qualifying event was due to involuntary termination or reduction in hours.

Is the subsidy only for medical?

No, all group health plans are eligible except FSA.

The maximum window for premium assistance is this the federal 18 months, or if an employer is subject to state extensions do they need to follow those?

If the participant is eligible for COBRA or comparable state continuation during any portion of the subsidy period (April 1 - Sept 30), premium assistance is appliable.

If they are eligible for Medicaid does that mean they aren't eligible for the premium assistance?


We have employees who have chosen to go part-time due to other employment. Is this considered a reduction in hours? These folks are also leaving to take full-time work at the other employer's within a few months


I assume that an involuntary termination with cause is still eligible for the subsidy as long as it is not gross misconduct?


Involuntary termination definition? 

Currently, there is no definition from DOL on involuntary termination.

Will there be more clarification on "involuntary termination"? An employee who is terminated for willful poor performance could potentially be rewarded to not have to pay premiums.

This individual will qualify.

If a group incurs a reduction in size during the COBRA period and is no longer a 20+ group, does the original COBRA eligibility apply?  So, if a group has an 18-month period in 2020, if they became a less than 20 employee group in 2021, do employees who were eligible for 18 months at termination get that in 2021 or does the group default back to the state rule?

Based on the previous calendar year.



Subsidy Reimbursement


Is there any information available about the specifics on how employer gets reimbursed for COBRA subsidy?

Not yet.

How will people who have already paid premiums be reimbursed for the timeframe back to 4/1?

If a participant is determined to be an AEI, any premiums already paid for the subsidy period can be applied to a month after the subsidy expires (April payment can be applied to October for instance). If the participant is no longer in their maximum COBRA coverage period after the subsidy expires, a refund can be issued.

How will non-profits who don't pay taxes receiving reimbursement?

Nonprofits are required to withhold and remit employment taxes.

Review the employer submission of tax credit

We suggest consulting your tax accountant



New Clients & Historical QBs


Can you please address clients new to COBRA Point whose historical data is not in your system? Will there be an upload feature?

Clarity clients will need to enter any historical QBs that were involuntarily terminated or had a reduction in hours that were not provided to Clarity during implementation as a takeover in order for Clarity to offer a Second Election Notice.

What happens if a grp is new to Clarity and you don't have them on file going back the 18 months?

Same as above

If a client just moved to Clarity on 1/1/2021, how can they ensure that Clarity is communicating the ARPA notifications to all eligible individuals dating back to October 2019?

Same as above



Lookback Period


Does the lookback period for ARPA COBRA go back to October 1, 2019, 18 months prior to the effective date of ARPA, April 1, 2021?

Currently, the DOL has indicated the lookback period is 18 months. Eligibility for coverage is determined based on the participant's original qualifying event and if they are still within their maximum COBRA coverage as of 4/1/2021. In other words, if they could still have COBRA as of 4/1, they may be eligible for premium assistance.

How far back are we looking to identify these employees who are eligible for this subsidy?

Same as above

How far back does the pre-April 1st qualifying period start?

Same as above

What is the actual lookback date? How far back on involuntary terms do we look. Ex: 3/2020 or when?

Same as above

What date should we be looking back to for determining who is eligible?

Same as above

In addition to the NY State Continuation Special Window for Premium Assistance, the Maximum State Continuation Period is 36 months (instead of 18 months).  Must employers go back 36 months to identify AEIs?

Same as above




Do we have to pay the premium for just medical under this Act for AEIs or we have to pay the premium for benefits that were 100% employee paid too (ex: dental and vision)?

All group health plans are eligible for the subsidy except FSA

How will COBRA payments be collected from Clarity clients?

If a participant is an AEI and receiving the subsidy, they will not be charged for their COBRA coverage. Clarity clients will still be responsible for the associated admin fees and will be billed these fees monthly as normal. Additionally, the Clarity client is responsible for paying the plan or insurance carrier for premiums as normal as well.

Can you explain again about the carriers paying the premium for a small group?

When the continuation coverage involved is not COBRA (because COBRA applies to employers with 20 or more employees during the previous calendar year), the continuation coverage will be state continuation coverage through the regulation of the insurance industry. For these small groups that are not subject to COBRA, ARPA requires the insurance carrier to cover the cost – in other words, the insurance carrier provides the premium assistance.

What is the employer is subsidizing the COBRA premium as part of a severance package?

The tax credit is only available with respect to the portion of the cost that the employer pays where the employee would otherwise have had to pay. Because the employer pays part of the cost of COBRA as part of its severance program, the employer can only claim the credit for the portion of the cost of the coverage that the employee would otherwise have had to pay.  That does not include the part of the COBRA premium the employer provides already as part of the severance program.

Good morning, once thing I was searching everyone and could not find the answer to is about, is the employer responsible for the monthly premium payments as would normally pay them?

Yes. Premiums must be paid to the plan or the carrier as normal.



Clarity Fees


I had seen in an email from Oxford that they were going to pay the COBRA premiums for a small group under 20 employees?

COBRA does not apply if smaller than 20 employees in the prior calendar year. If Oxford is the insurance carrier, then yes, the carrier pays.

Will Clarity be charging an extra fee for the new notifications?

There will be a processing fee of $2.50 per AEI in addition to the regular fees associated with mailing the required letters.

Is there a fee charged to the employer group for Clarity sending out the new notices?

Same as above

Will Clarity charge the facility for the premium?

Clarity will not charge clients the premium if the subsidy has been applied to a participant record. The client will still be responsible for the admin fees.

So, the cost is $2.50 per notice plus mailing costs? Is this cost for only the people who termed prior to 4/1?

There will be a processing fee of $2.50 per AEI in addition to the regular fees associated with mailing the required letters.

I was under the impression, based on information from another webinar, that the carrier was responsible for covering the COBRA premiums on FULLY INSURED plans, not the employer.  Can you clarify this, please?

Only if not COBRA

How does the ER pay the admin fee to the COBRA administrator?

Clarity clients will be billed the admin fee in their monthly invoice from Clarity.





Who Pays for the mini-COBRA, employer or carrier?

If not also COBRA, the carrier pays.

So, for Mini COBRA the premiums for the COBRA premium assistance are paid by the Insurer?

Same as above

Hoping you can clarify how ARPA relates to Employers that are subject to Mini COBRA/State Continuation. (i.e., NY State Continuation).  Do the employers need to offer the Special Window to AEIs who are currently on Continuation AND/OR those AEIs had previously declined Continuation?

Have to comply with state and federal guidelines




Model Notice


Is Clarity going to send us a copy of the model notice?

The model notice can be found on the DOL's website, however, if you wish to see the notice that Clarity will use during the subsidy period, you can request this from your Client Relationship Manager.

Do you have to send a Special COBRA Window notice to voluntary terminated staff, or only those who are involuntary or reduction in hours?

For participants in the lookback period, only those who are identified as AEIs and who are not currently enrolled need to receive a Second Election Notice.  For those who become newly eligible for COBRA during the subsidy period, they will receive a COBRA Specific Rights Notice with the AEI General Notification

Do the new COBRA notices need to be sent to all COBRA QE's or only those who are subsidy-eligible (AEI)?

Same as above

Are there dangers to not sending out the model notice, as is?

Yes, Clarity is required to notify individuals of the premium assistance if they become eligible after 4/1.

Is Clarity going to be sending these ending notifications?


Do we have the model notices from the federal government yet?


Does Clarity benefit solutions send the notifications to eligible individuals?

Yes, as long as the participant is identified by the Clarity client on our Portal as an AEI.

We have former eligible employees who are contacting us now asking how they enroll in COBRA subsidy before they receive the special notice? What do you advise we tell them?

Participants cannot enroll until we are able to identify them as an AEI. The first step in the Clarity process will be for Clarity clients to log into the Clarity Portal and indicate if each QB is an AEI or not.  From that point, Clarity will prepare the appropriate letters to go out.  QBs will need to make an election and send the forms back in order to be enrolled. If they are eligible, their coverage will retroactively date to 4/1.

Will Clarity be sending out these new notices for employees who Clarity sent out the original COBRA notifications?

Yes, these individuals will receive a Second Election Notice

If Clarity is the COBRA vendor for our employer group, will they handle sending out the new required notices? If yes, is there a cost per notice? How will Clarity know who to send the notices to (former employees who are AEIs)?

Yes, Clarity will send out the required notices. Normal mailing fees will apply to any letters that are sent out to participants and an additional $2.50 fee will be applied for each AEI. Clarity clients will need to visit the Clarity Portal where a list of QBs who are still within their maximum COBRA coverage period will be presented. Clarity clients will need to indicate if each QB is an AEI or not. From there, Clarity will update the COBRA system with this new status information and the appropriate letters will be sent to the newly identified AEIs.






Does the AEI have to sign something that says they don't have other group health plans or Medicare eligibility? Or that they have to notify us if they become eligible during the special premium window?

Yes, an attestation form will be included that must be completed by the participant indicating that they are not eligible for other coverage or Medicare.

How do you know if they become eligible under another group plan (for example, if they obtained another job offering benefits?  Most employers require an employee contribution.   Why do so, if they can get coverage for free.

Employers would not know if participants became eligible for other group health coverage.  At the time of the election, they will need to complete an attestation form indicating they are not eligible for other coverage or Medicare. Thereafter it is the participant's responsibility to let the employer know if they obtain other coverage.


Clarity COBRA Portal


Will we see the employees that denied coverage due to cost on the Clarity website?

Any individual who previously declined coverage who is still within their maximum COBRA coverage period will be presented on the Clarity Portal and the AEI status will need to be identified for these individuals.

Or will the portal reporting give us the eligible based on date and we then let you know who an AEI is?

The Clarity Portal will include any participant who is still within their maximum COBRA coverage period as of 4/1.

When is Clarity notifying clients to go to the portal to select previous employees that need notices sent?

We are targeting 5/1 to have the ARPA tool live in the Clarity Portal. Clarity Clients will receive an email notification when it is available.





Is there an HRCI or SHRM class code to receive credit for attending this webinar?


What if the Employer renewed their Group plan since the Employee terminated and their original plan design is no longer offered?  Does the AEI enroll on COBRA under the existing plan offered by the Employer?

Yes, only plans that are current will be presented to an AEI for election. 

Should we be updating our termination letters to include notice of this? Or is that not required since they will get notification from Clarity

It is an employer's decision to include information pertaining to ARPA in any termination communications you send. Clarity will be informing them of their rights under ARPA in the General Rights Notice as well.

Is this mandatory?


Can you talk about FURLOUGHED employees due to COVID?  If an employer still has employees out on furlough, can they term them now and allow them to enroll in 100% COBRA as of April 1st?

Since Clarity is unfamiliar with specific terms of a client’s furlough, we cannot answer this question. It is possible furlough may have already triggered COBRA. If the furlough is for a reduction in hours, that would qualify. We suggest reviewing your specific furlough terms.

You can't cancel them at all during the FFCRA declared public health emergency for non-payment, can you?

During the suspension under FFCRA, the person does not have COBRA coverage. The person is in the period of time for electing COBRA coverage. There are two recognized ways of handling this: (1) keep coverage in place and seek premiums once they elect, or (2) stop coverage until coverage is both elected and paid. Stopping coverage is canceling coverage subject to reinstatement if the COBRA is eventually elected and paid.

What happens if a company terminates all medical benefits during the April - September period?

Regular COBRA rules apply. If an employer offers no medical benefits to any employees, COBRA ends.

How does this interrelate with the FFCRA extension of COBRA benefits?

If a participant wants premium assistance, they have to elect within the specified timeframes; no extensions apply.

Can we legally cancel an assistance eligible individual's COBRA benefits for non-payment during the course of the declared public health emergency?

Once someone is an AEI, their employer has to pay the premium so there is no non-payment situation.

Is there any information available about the specifics on how employer gets reimbursed for COBRA subsidy?

Not yet.

How will people who have already paid premiums be reimbursed for the timeframe back to 4/1?

If a participant is determined to be an AEI, any premiums already paid for the subsidy period can be applied to a month after the subsidy expires (April payment can be applied to October for instance). If the participant is no longer in their maximum COBRA coverage period after the subsidy expires, a refund can be issued.