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New COBRA Subsidy Provisions


1.5 minute read

Part of the American Rescue Plan Act (ARPA) provides a 100% subsidy of premiums for employer-sponsored group health insurance under COBRA. COBRA requires group health plans to allow covered employees and their dependents continue their health plan coverage for a period of time when it is lost due to specific events.

The subsidy is generally available to those who elected COBRA, become eligible for COBRA, or declined or discontinued COBRA and are still within their original COBRA coverage period.

The ARPA subsidies will cover the full cost of COBRA from April 1 – September 30, 2021. The subsidies are funded through a payroll tax credit. Employers will be required to provide new notices about the subsidy to employees. The Department of Labor will be issuing a model general notice in April.

The ARPA also allows individuals to switch to similarly priced health coverage if their employer allows it. The new coverage can’t have a higher premium then their previous coverage and it must be offered to similarly situated active employees. The change must be elected within 90 days of receiving notice of this option.

Download the bulletin for more details.

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This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Rick Labian

Rick Labian

Rick Labian lives by the Golden Rule – he is guided by what is best for his clients and treats others as he would like to be treated. Rick acts as an advisor and advocate for his clients, helping to identify goals for their benefit programs and building a strategic plan together. Rick has a rich history with NIS. He has worked for NIS for over 20 years, leading the Eastern region. Rick is the manager and leads the FBC Client Management Team. Rick’s leadership and experience aids our internal staff and all of NIS’ FBC clients. Rick is a licensed insurance agent and is ACA certified through the National Association of Health Underwriters.