Issue 20a

The dust around the 2021 American Rescue Plan (ARP) has finally begun to settle, and second-chance COBRA offers have been mailed to assistance-eligible individuals (AEIs)! UPMC Benefit Management Services (BMS) has been sending out updated COBRA offers with language that reflects ARP regulations for qualifying events through Sept. 2021.

Let’s look at the subsidy, how it will be reported to you for payment, and how you can obtain the necessary forms related to the quarterly tax credits associated with this subsidized premium payment.

Because you are a federal COBRA client, you are responsible for paying your AEI subsidized premiums. The federal government will credit you for these payments with a quarterly tax credit. However, you will have to report these premiums to your tax department to ensure the credit is reported to the IRS accurately. For more information about the reduction in deposits for the tax credits, see Notice 2021-24 - Opens in new tab (see page 7).

BMS is committed to reporting your subsidized premiums accurately to ensure your records are correct. As such, we will provide monthly premium remittance reports. If you have AEIs participating in your COBRA coverage, you will receive separate invoices and backups associated with the subsidy.

Please note:

• The invoices reflect the AEI subsidy premiums fronted by BMS.
• The backup reports detail the participants, plans, premiums, and administration fees.
• Your tax department should use the backups for quarterly tax reporting purposes.

Here is an example of an ARP subsidy premium invoice:

The invoice will include a backup that ties to the ARP subsidy to be “funded” by the employer. Here’s an excerpt from a backup:

As always, contact your BMS COBRA analyst with any questions related to AEIs, the subsidy, and the payments you may have.