ARPA COBRA Premium Subsidy: Am I Eligible?

ARPA COBRA Premium Subsidy

With the passage of the American Rescue Plan Act (ARPA) in March 2021, Congress approved a limited time COBRA premium subsidy for certain individuals. Here are a list of questions you may have about the ARPA COBRA Premium subsidy.

Am I eligible for the ARPA COBRA premium subsidy?

To be eligible for the COBRA subsidy:

  1. You must have had an involuntary loss of employment or a reduction in hours
  2. You must be eligible for COBRA coverage during the subsidy period

The loss of employment or reduction in hours does not have to be related to a COVID-19 reason. If you had a reduction in hours, it does not have to be involuntary to be eligible for the subsidy.

According to the IRS, furlough counts as a qualifying event that is eligible for the COBRA subsidy.

Does death of an employee, divorce, or if my spouse becomes Medicare eligible count as a qualifying event for the COBRA subsidy?

For the purpose of the subsidy assistance, only involuntary loss of employment or a reduction in hours.

When is the subsidy period?

The subsidy lasts from April 1, 2021 through September 30, 2021.

What if my COBRA coverage ends before or during the subsidy period?

If your COBRA coverage ends before the subsidy period, you will not receive any premium assistance. If your coverage ends during the subsidy period, you will receive assistance until that date; when the coverage ends, you will no longer receive the subsidy.

How much is the subsidy?

The ARPA COBRA premium subsidy covers the full cost (100%) of your group health plan. Since plans and coverages vary per person and employer, the cost is not the same for everyone.

Generally, during a non-subsidy period, COBRA continuation coverage is paid by the eligible individual.

Who pays for the premium and how is it reimbursed?

Your employer will pay for the premiums and then be reimbursed by payroll tax credits. There is no out-of-pocket premium cost for the eligible employee.

What types of coverages are eligible for the subsidy?

If you were on your employer’s group health plan, dental, or vision plans, you may be eligible for premium assistance.

How do I sign up?

You should receive an election notice from your COBRA plan administrator. Follow the instructions in the notice.

Can I elect COBRA if I have already turned down coverage?

As long as your COBRA election window is still open, you may choose to enroll even if you have turned down coverage.

What happens if I am not eligible for the subsidy, but I receive it anyways?

If you falsify your eligibility, you could pay a fine of $250 or 110% of the premium subsidy (whichever is greater).

Are my dependents eligible for COBRA premium assistance?

If you had family coverage at the time of the qualifying event, your dependents are also eligible for premium assistance.

For more information about the ARPA COBRA premium subsidy, contact your benefits administrator.