New COBRA Subsidies in the American Rescue Plan (ARPA)

President Biden has signed the massive American Rescue Plan Act of 2021 (ARPA), which includes a federally-financed COBRA subsidy that is available for up to six months for eligible individuals. The COBRA subsidy will be available beginning on April 1, 2021 and end on September 30, 2021. Further guidance will be coming from the DOL and IRS, but is some basic information.

Who is eligible? Individuals (who are qualified beneficiaries) who were involuntarily terminated from employment or had a reduction of hours. So, employees that quit, or voluntarily left employment are not eligible for the subsidy. Assistance eligible individuals (AEIs) include employees plus affected spouses and children.

  • Individuals previously eligible for COBRA coverage, but who did not elect COBRA and have coverage that would have extended into the subsidy period.
  • Individuals previously eligible for COBRA coverage, elected, but dropped coverage for non-payment, and have coverage that would have extended into the subsidy period.
  • Individuals who are or become eligible during the subsidy period.

What coverage is eligible for the Subsidy? The subsidy will include all health coverage for which COBRA must generally be provided with the exception of health flexible spending accounts (FSA). Subsidized coverage will be for dental and vision coverage, as well as medical coverage. And, the subsidy will also available for continuation coverage required by State “mini-COBRA” laws.

What is the subsidy period? The COBRA subsidy begins April 1 and ends September 30, 2021. An employee’s eligibility period for the subsidy may end prior to September 1, when their 18 month maximum coverage period ends based on their original qualifying event (for instance, employee was laid off February 1, 2020, the 18 months of COBRA would end July 31, 2021 – so subsidy would end July 31, 2021).

New Election Period Starts April 1, 2021. Although employers do not have a Model Notice for the Extended Election Period from the DOL, an Assistance Eligible Individual (AEI) must be given a new 60 day election period for COBRA, starting April 1, 2021. SO, individuals that did not elect COBRA, or dropped COBRA get a new chance to enroll in COBRA and get the subsidies.

How much is the subsidy? Depends. There will be some rules about the enrollment options available to the AEI, and the group health plan will cover the cost, which will be reimbursed (including the administrative fee) by the Federal government via a payroll tax credit. So, the subsidy amount will vary by employer, based on the cost of coverage.

Regularly check the DOL – COBRA webpage for news and updated forms.

HR Categories
1095C form300 Log401(k)8(a)(1)AccommodationAffordable Care ActAmericans with Disabilities ActArbitrationARPAAuditsBackground screeningBilingualBonusesBusiness ExpensesCannabidiol (CBD)CDCCDLCFPBcharityChild laborCHIP NoticeChristmas partyClearinghouseCOBRACommercial Motor Vehicle DriverCompany CultureCompany PropertyCompensationComplianceConcerted ActivityCONNECTConstructionconsultstuConsultstu TeamContagious diseaseCoronavirusCraft BeerDepartment of LaborDirect ThreatDisabilitiesDiscriminationDOTDownsizing and RestructuringDress CodeDriversDrug and AlcoholDrug Free WorkplaceE-VerifyEEO-1 FormEEOCEmployee benefitsEmployee HandbookEmployee IllnessEmployee InjuryEmployee MisconductEmployee PoliciesEmployee RecognitionEmployee ReferralEmployee RightsEmployment PosterERISAEssential functionsExecutive OrderExempt EmployeeExit InterviewFair Credit Reporting ActFair Labor Standards ActFall ProtectionFederal ContractorsFFCRAFinancial Well-beingFirearmFitness for DutyFlorida rulesFluencyFMCSAFMLAForm 5500Form W-4Fractional HRFTCGender Non-conformityGeneral HR QuestionsGoal SettingGPSGroup Health InsuranceHarassmentHiringHolidaysHR ComplianceHR CostsHR ResourcesHR softwareHSAHuman ResourcesHuman TraffickingI9 FormImmigrationIndependent ContractorIndividualized AssessmentInjury StatisticsInsuranceInterviewsInvestigationsIRSITAJob DescriptionJob PostJoint EmployerK1Leave of AbsenceLeaving a PEOManagementManagerMedical ExamsMedical Marijuanamental healthMilitary AppreciationMinimum WageMoraleNational OriginNew HireNLRBNo-match letterNon-complete AgreementsOnboardingOpioidsOPTOSHAOutplacementOvertimePaid LeavePay CardsPay or PlayPaycheck Protection ProgramPayrollPayroll Protection ProgramPerformance Improvement PlanPerformance ReviewPersonnel FilePost offer medical questionnairePostersPregnancyPublix Immigration CertificationReasonable AccomodationRecall LetterRecord KeepingRecruitingReligionRemote employeesRestaurantsResumeRetaliationRetentionRetirementRewardsRisk ManagementSafetySalaried employeesSBASection 7 RightsSelf AppraisalSick LeaveSMART goalsSocial MediaSocial Security cardStart upTaxesTemporary EmployeeTerminationTipped EmployeesTitle VIITPD BenefitsTrainingUnemploymentUniformsUSCISVaccinesVolunteerW2W4Wage and HourWellness programWork from HomeWorkers CompensationWorkplace MonitoringWorkplace ViolenceWrap Plans
Show All Categories
Show Less Categories
Archives
Need on-going HR support?
We have affordable HR retainers that offer a unique alternative to full HR outsourcing or the hiring of a full time HR employee. We design unique solutions to match your business strategy and budget. We have a proven track record of helping companies from many industries. We listen and probe to understand your needs and goals, before we offer recommendations and realistic solutions.
Contact Us Now