The American Rescue Plan Act (ARP) provides up to six months of COBRA payments from April 1, 2021, through Sept. 30, 2021, for those who lost or will lose their employment-provided medical coverage between Nov. 1, 2019, and Sept. 30, 2021. This provision of the ARP can assist members who may have lost or may lose their jobs, even temporarily, and correspondingly lose their medical coverage. The following information may be of interest to your members.
To receive this benefit, you must meet the federal government’s eligibility criteria and must apply for the subsidized COBRA. You must enroll within 60 days from when you receive your updated COBRA notice or April 1, 2021, whichever is later.
Here are the eligibility requirements to receive payment for COBRA from the federal government:
- You must have a COBRA qualifying event that is a reduction in hours or an involuntary termination of covered employment between Nov. 1, 2019, and Sept. 30, 2021;
- You must elect COBRA continuation coverage;
- You must NOT be eligible for Medicare; AND
- You must NOT be eligible for coverage under any other group health plan, such as a plan sponsored by a new employer or a spouse’s employer.
The U.S. Department of Labor has released a longer list of frequently asked questions about subsidized COBRA, including the rules for eligibility. You can read these FAQs at the DOL’s website by clicking on the link below:
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cobra-premium-assistance-under-arp.pdf
Even if you enrolled in another health plan through Obamacare (ACA) or BlueCross BlueShield, etc., you are eligible to receive subsidized COBRA. But please remember, if you are eligible and you wish to enroll in free COBRA, you should contact your new insurance provider to cancel that coverage.
To receive free COBRA coverage, you MUST sign up with your employer-sponsored healthcare plan. Your healthcare plan provider is required to notify you of your right to enroll in subsidized COBRA by May 31. Contact your Human Resources Department or Plan Administrator directly for more details and watch for mail from your healthcare plan.
If you were covered by an employment-based group health plan on the last day of your employment or a family member’s employment (or the last day before you or your family member’s reduction in hours causing a loss of coverage), the plan or issuer should provide you and your beneficiaries with a notice of your eligibility to elect COBRA continuation and to receive the premium assistance. The notice should include any forms necessary for enrollment, including forms to indicate you are an Assistance Eligible Individual and you are not eligible for another group health plan and are not eligible for Medicare. If you believe you are an Assistance Eligible Individual and have not received a notice from your employer, you may notify your employer of your request for treatment as an Assistance Eligible Individual for periods of coverage starting April 1, 2021. If you are an Assistance Eligible Individual, the ARP provides you must be treated as though you have paid in full the amount of such COBRA premium from April 1, 2021, through Sept. 30, 2021.
If you apply for subsidized COBRA and qualify, you do not have to pay any of the COBRA premium for the period of coverage from April 1, 2021, through Sept. 30, 2021. The premium is reimbursed directly to the employer, plan administrator or insurance company through a COBRA premium assistance credit. In addition, you will not need to pay any part of what you would otherwise pay for your COBRA continuation coverage, including any administration fee that would otherwise be charged.
We understand some of this information may be confusing, but the bottom line is the American Rescue Plan will subsidize COBRA for people who lost or will lose their employment-provided health coverage anytime between Nov. 1, 2019, and Sept. 30, 2021. Details are available at:
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cobra-premium-assistance-under-arp.pdf
In Solidarity,
Richard Lanigan
President