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Subsidy Available to Certain COBRA Participants

The American Rescue Plan Act of 2021 (ARPA) provides for a 100 percent subsidy of COBRA premiums from April 1, 2021 to September 30, 2021 for Assistance Eligible Individuals (AEIs). To qualify, AEIs must have experienced a COBRA qualifying event other than a voluntary termination of employment. The subsidy is not available to people who voluntarily left their jobs.

Please note the following:

  • Premiums for medical, prescription, dental, and vision coverage for all AEIs are subsidized at 100 percent during the coverage period.
  • To qualify as an AEI, a person must be COBRA-eligible as of April 1 or later and not be eligible for other coverage during the subsidy period.
  • The subsidy period lasts for up to six months (through September 2021) except for AEIs who exhaust their COBRA eligibility or qualify for other coverage. AEIs receiving the subsidy are required to inform the plan if they are eligible for other coverage.
  • AEIs who become COBRA-eligible after April 1, 2021, receive the subsidy through September 2021, even if they receive less than six months of premium subsidies.
  • The law establishes an extended election period of 60 days from receipt of the ARPA eligibility notice during which AEIs can enroll in subsidized coverage retroactive to April 1.
  • AEIs are limited to switching to a plan with the same or lower premium plan than they had prior to the qualifying event.
  • Employers are responsible for subsidizing the full premium plus the 2 percent administration fee. Companies will be reimbursed by credits against payroll taxes owed.

For further information, contact Benefit Strategies by telephone at 888-401-3539 or ERSC at 301-517-8100 or email ERSC.