With the passage of the American Rescue Plan Act of 2021 (ARP), COBRA has
been temporarily changed to assist employees affected by the COVID-19 pandemic.
As you have probably heard, assistant eligible individuals (AEI) will receive up
to six months of COBRA coverage at no charge. As with any government program,
employers/COBRA Administrators are required to provide numerous notifications.
The law requires employers to provide a notice (prepared by the Department of
Labor) to individuals that experienced an involuntary termination of employment
(other than for gross misconduct) or a reduction in work hours leading to a loss
of group coverage. The notice explains who is eligible for the “free” coverage
(medical, dental, vision, HRAs, but not FSAs or life insurance) from April 1,
2021 to September 30, 2021. If an individual is eligible, he/she must “elect” to
receive the free coverage by completing the election forms.
COBRA Solutions, Inc. has updated the software to produce the required
notices and manage the Participants during this time of subsidized rates. The
following are the steps necessary to comply with ARP.
Update your Software to Version 21.5
- Under the File menu, select the “Update Software via Internet” option.
(If Microsoft Windows asks if you wish to start as “Administrator,” select
- Click the Next button to access the files.
- You will be asked if you wish to review the new letters. You can select
the desired letter and you will be shown the changes in red text.
- Click the Next button and you will be provided a button to select the
letters you wish to update and the groups that will be updated. If you do
not select the letters (not recommended), they will not be updated in your
Once updated, you will notice the logo in the upper right-hand corner will
have a red “American Rescue Plan” under the Version number. You cannot begin
administering subsidized premiums until you are on version 21.5.
- If you are told that you do not have an Internet connection, the most
likely reason is that port 21 is closed on your router. Ask your IT Department
to open port 21 (ftp). The IP Address is, 126.96.36.199 and the port number is,
- If this procedure seems like it downloaded some files but when it
starts, it shows an older version, it is possible the files got downloaded but
your system would not allow it to unzip/extract. Make sure everyone is out of
the COBRA software and try the update again.
- If it still did not update to
the newest version, you may try running the CAMSERVAPP.exe (found in the same
location as the COBRA.exe). This tool uses HTTPs to download the files and it
will usually work when the other procedure does not.
If your firewall blocks you from obtaining the update through the
software (as described above), you can directly download it by visiting www.cobrasolutions.com/firewall.
- Click on the link above.
- Follow the instruction on the web page.
- Under step #3, you will be asked to provide a password for the update.
The current password can be found in the emailed version of this newsletter
- Continue to follow the steps followed by entering the COBRA
Administration Manager and replace the current letters with the new ones.
Sending the Notice to Previously Notified Qualified Beneficiaries
- Look for the new Menu Items at the top of the screen called “ARP” and
then select the American Rescue Plan option. You should now see the
Instructions tab. Please read the instructions before continuing.
- Select the ARP Letters tab to produce the letters explaining the
individual’s right to subsidized rates. This letter needs to be mailed by
May 31, 2021.
- Select the first letter in the dropdown box and a list of people needing
the ARP Election Notice will appear in the lower list box. At this point you
may click the Review/Edit button to review the letter prior to printing.
(For multi-company users, there is only one letter for all your groups. Any
edits made will be printed for all groups.)
- Now select one or more individuals from the list to send to the printer.
You may want to select just a portion of the letters to not overwhelm your
printer. Please be aware that the individuals in the list are ALL Terminated
employees and employees who experienced a Reduction in Work Hours. If you
would like to only send notifications to Involuntarily Terminated employees
and individuals that experienced a Reduction in Work Hours, you will need to
select them individually. You can find a report to identify Involuntarily
Terminated employees under the Reports menu heading and then selecting ARP
- Once the list is empty, you are done.
- If you have new groups that you may not have data for from the past 17
months, we have included a “Generic” ARP letter. The Generic ARP letter will
not have employee information mail merged into it. You will have to create
mailing labels for all employees that were involuntarily terminated or
experienced a loss of coverage due to reduced work hours (regardless if the
reduction was done voluntarily). Select the “Generic” ARP letter and make as
many copies as you need. Then use mailing labels, stuff and mail via USPS
first class mail.
- The personalized letters are designed to be folded
and placed in a #10 windowed envelope. If you do not have the windowed
envelopes, after printing the letters, you may go under the Notifications
Menu and select Mailing Labels. Select the “ARP Eligible Individuals” from
the dropdown list and print the labels.
- If you have a printer problem
and need to recreate the list of qualified beneficiaries, select the
Reproduce List tab, select the American Rescue Plan Election Letter and then
click the Update List with Original List button. Begin printing from the
last letter printed correctly. That is the ONLY time you would re-create the
Once people begin returning the election forms. There will be three classes
of former employees who will be returning the election form and should be
handled in the following manner:
COBRA Qualifiers who did not elect COBRA in the past.
- Select the Events Menu option.
- Select the Qualifier from the
- Next, select the person to be the subscriber (but do NOT
select all the dependents continuing – this would create separate files for
everyone) and click the Ok button.
- Complete the form, making sure you
enter their COBRA Qualifying Event Reason as an “Involuntary Termination of
Employment” or “Reduction in Work hours.” Once the reason is selected from the
dropdown list, it will expose the “Elected A.R.P. Free Coverage” checkbox in red
towards the bottom of the form. Click the checkbox to begin offering free
- When you click the Ok button, the system will ask if the person
wishes to start paying (or not paying) premiums on their original COBRA start
date OR begin on April 1st without having to pay premium for prior months. The
system will then ask if you wish to produce coupons or an invoice. If the
individual is going to pay back premiums, you will have to create an invoice for
April 2021 for them because Coupons will not reflect the previous amount owed).
Perform your standard COBRA administration procedures from here on.
COBRA Participants who are behind on their COBRA premiums and have
been Terminated or Suspended (for any reason).
- Select the Events menu oiption.
- Select Reinstate COBRA Coverage.
- Select the individual from the dropdown list and you will be asked if
you want to reinstate coverage back to the date they were terminated in the
system OR April 1, 2021. Once, reinstated, their billing will reflect their
COBRA Participant who is paid up through March 31st or after.
- Open their Participant file and change the Qualifying Event Reason to
either Involuntary Termination of Employment or Reduced Work Hours.
- Next click the checkbox for “Elected A.R.P. Free Coverage.
- Click the Ok button and the system will update their billing starting
Free Premiums on April 1s.
- The main issue we foresee here is that people who experienced a
qualifying event over a year ago may have been enrolled in a plan that no
longer exists. You will need to enter them into a current plan that is
similar to what they had when they were employed. For Participants, run them
through the “Participant Open Enrollment/Plan Change procedure under the
Events Menu. You will be asked the effective date, you will want to enter
the date the new plans went into effect. Once, you have them enrolled in the
correct plan(s), perform the correct election procedure.
Expiration of Premium Assistance
In late August 2021, you will need to send another notice explaining that the
government subsidy premium program is ending September 30, 2021. This letter
will be produced in the same manner as the initial ARP notifications under the
ARP Menu. To eliminate the letter being sent too far in advance, it will not
show in the drop down list until August 20th. We will provide further guidance
on this as it is released.
We have added a new section of reports (under the Report Menu) called ARP
Reports. These reports detail the people that were sent the ARP Election Letter
as well as those who elected to receive the subsidized rates. It will also
provide a report which will assist you in receiving credit for paying these
individual’s insurance on a quarterly Form 941 payroll report. Lastly, a report
has been designed to show if premiums paid (for months after March 31, 2021) by
a participant needs to be reimbursed.
ARP will also pay premiums for state continuation coverage. For this reason,
employers in New York, Texas, Connecticut and California will have to send
letters to involuntary terminated individuals dating back to the following:
New York: 04/02/2018, Texas: 04/02/2019, Connecticut: 10/02/2018 and
We know you will have questions while performing the administration of the
American Rescue Plan Act of 2021 and we will assist you the best we can in the
operation of the software. Due to time constraints, there are certain items we
cannot provide direction. The following are questions that we won’t have time to
- What is the definition of an “Involuntary” termination
- What is a definition of “gross misconduct?”
- What employers are not responsible for adhering to ARP
- How does the employer get reimbursement by the government?
- Any questions dealing with state continuation.
- Any question dealing with an employee’s personal situation and their
eligibility to receive free coverage.
For answers to many of these questions, please see,
COBRA Premium Assistance under the American Rescue Plan Act of 2021 FAQs
GGood luck with your administration and review
up-to-date information on ARP.