OCA's ARPA Update (Week of May 24th)
OCA remains committed to being at the forefront of ARPA. Today, we wanted to focus on the Extended Election Notice and provide OCA's latest ARPA operational processes.
OCA Issues the Extended Election Period Notices
Expected Completion Date: 5/23/21 through 5/26/2021
OCA has begun issuing this notice with the subsidy request form (view sample here) to potential Assistance Eligible Individual (AEIs) who were either involuntarily terminated or had a reduction in hours, and who were identified as (1) one the following:
- AEI and/or their Dependent QBs who are currently on Federal COBRA (or applicable State Continuation) or;
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AEI and/or their Dependent QBs who either did not previously elect Federal COBRA or elected but let their coverage lapse. These individuals must be offered an additional window to prospectively elect Federal COBRA coverage effective April 1, 2021. We refer to this as the "2nd bite at the apple." Remember, the 2nd bite does not apply to State Continuation groups.
- In addition to the above, if the employer did not respond to OCA's previous verification request emails, OCA issued this notice to individuals whom OCA was unable to identify their termination reason.
- Clients will be able to view a copy of the notices on the myRSC portal within 3-5 business days of the notice being mailed.
What happens after the Extended Election Notice is issued?
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AEIs will have 60 days from the date the notice was issued to request the subsidy. The recent IRS guidance (Notice 2021-31) confirms the need for affirmative attestation (Request for Treatment as an Assistance Eligible Individual Form) by the potential AEI that they qualify for the subsidy, which is what OCA strongly recommended all along. The guidance doesn’t mandate it, but it makes it virtually impossible for the employer to substantiate the credit because they would have to provide documentation proving that the AEI wasn’t eligible for other coverage, which an employer wouldn’t be able to provide.
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OCA will notify the employer contact(s) via email if/when the AEI has completed the subsidy request form. OCA's email will include the completed subsidy request form, the plan(s) elected, subsidy timeframe, and any additional information needed to process the subsidy request.
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Employers who are entitled to receive the premium tax credit can receive the premium tax credit by reporting the credit on the designated lines of its federal employment tax return(s), usually Form 941, Employer’s Quarterly Federal Tax Return. To learn more, please read IRS Notice 2021-31 (see Questions 71-78).
What happens if the AEI doesn't complete the subsidy request form within 60 days of issuance?
OCA will be mailing a "Failure to Elect COBRA/ARPA Subsidy Notice" to the AEI. This is not a required notice under ARPA, however, OCA will be sending a failure to elect notice for those individuals that were potential AEIs but did not complete the “Subsidy Request Form” within the 60 day timeframe. No additional notice fees will be charged by OCA. We feel this will be very beneficial to potential AEIs who may have thought the subsidy was automatic.
Reminder...OCA Hosting ARPA Webinar
OCA will be hosting a webinar on Thursday, May 27th, at 3PM EST to address last week's IRS Notice 2021-31. In addition, OCA will discuss the latest OCA updates pertaining to the issuance of the required ARPA notices.
