Who is an AEI?
The IRSs guidance further clarifies who is an AEI for purposes of the COBRA premium subsidy. If COBRA continuation coverage stems from a qualifying event (other than an involuntary termination) that occurs before an involuntary termination, the involuntary termination does not cause the qualified beneficiary to become an AEI. For example, if an employee has a reduction in hours causing a loss of coverage and later suffers an involuntarily termination of employment, the involuntary termination does not cause the individual to become an AEI. Also, in order to be an AEI, the individual must be covered by the plan at the time of the involuntary termination. Thus, a spouse or dependent child who is not covered before the involuntary termination but is added to the plan during a later enrollment period is not an AEI and does not benefit from the COBRA subsidy. ARRA Notice Requirements ARRA requires employers to provide notice of the availability of the ARRA subsidy and special election perio
