American Rescue Plan Act of 2021 provides COBRA subsidies from April 1, 2021 to September 30, 2021 for Assistance Eligible Individuals

The American Rescue Plan Act of 2021 was signed into law on March 11, 2021.

Assistance Eligible Individuals (AEIs) are employees and their families who are or would have been eligible for continuation coverage under COBRA during the months of April 1, 2021 to September 30, 2021. Highlights of the bill include:

• An AEI must be or would have been eligible for COBRA due to Involuntary Termination or Reduction in Hours. Other events do not qualify.

• An AEI who had an Event on or after October 1, 2019 which would have resulted in possible COBRA coverage will need to be notified by May 31, 2021 of the option to elect the subsidized coverage. Unlike normal COBRA provisions an AEI can have a break in coverage prior to the subsidized coverage.

• Plans are subsidized at 100% and coverage includes group Medical, Dental, and Vision

• The subsidized coverage is also available to those AEIs covered under state continuation laws rather than federal COBRA law

• The subsidized coverage time period cannot exceed the maximum coverage term under COBRA

• AEIs must not be eligible for other group health plan coverage or Medicare

• Plans must notify AEIs who elect the subsidized coverage a notice of expiration of the subsidy 15 - 45 days before the subsidy expires

• COBRA premiums during the subsidized period are paid by the employer to the carrier. Employers will use the Quarterly 941 to be reimbursed for the cost of the subsidy plus the 2% administration fee.

• Election of this temporary subsidy affects premium subsidies offered on the Marketplace under ACA

The Department of Labor has a page about the ARPA subsidies here - https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy - it includes FAQs as well and Model Notices.