The American Rescue Plan Act of 2021 (ARPA) provides for a 100% COBRA premium subsidy to assistance eligible individuals for the period of April 1, 2021 through September 30, 2021 (the “Subsidy Period”). The subsidy is available to those who become COBRA eligible during the Subsidy Period as well as those currently enrolled and those who are within their COBRA continuation window but who failed to elect or previously dropped coverage.
Eligibility for the COBRA Subsidy
The COBRA subsidy is available to any person who loses (or has already lost) their health coverage due to an involuntary termination of employment (for example, layoff) or reduction in hours. Any such individual will be eligible for the subsidy if any of the following apply:
- The individual becomes eligible for COBRA coverage during the Subsidy Period;
- The individual is currently enrolled for COBRA coverage; or
- The individual became eligible for COBRA coverage prior to April 1, 2021, and the period of COBRA coverage to which the individual would be entitled under federal law (18 months) overlaps with the Subsidy Period — even if the individual did not elect COBRA when it was initially offered or elected COBRA but discontinued it before April 1, 2021.
Amount of the Subsidy
The ARPA provides for a 100% COBRA premium subsidy. As such, during the Subsidy Period, individuals who are eligible for the COBRA subsidy are not required to pay their COBRA premium.
Duration of the Subsidy Period
The duration of the subsidy period is from April 1, 2021 to September 30, 2021. However, an individual would cease to be eligible for the subsidy earlier than September 30, 2021, if the individual’s maximum period of COBRA coverage under federal law (18 months) ends before September 30, 2021. An individual would also cease to be eligible for the subsidy earlier than September 30, 2021, if the individual becomes eligible for coverage (even if not actually enrolled) under another group health plan or Medicare. Individuals are required to notify TeamCare if they become eligible for such coverage and will be subject to a federal penalty if they fail to do so.
Notices will be provided to members who potentially qualify for the subsidy. For those members who received a COBRA notice previously but did not elect COBRA when it was initially offered or elected COBRA but allowed it to discontinue before April 1, 2021, a new notice will be provided no later than May 31, 2021, describing the subsidy with instructions for election.