The American Rescue Plan Act of 2021 offers 100% premium assistance for individuals under COBRA for a six-month period. What does that mean to you? Here are a few basics:
- Eligibility extends to employees and their family members who lost coverage due to involuntary termination or reduced work hours. These individuals do NOT qualify for premium assistance if they are eligible for other group plan coverage or for Medicare.
- Employees aren’t required to elect coverage retroactive to the date of their qualifying event or other date prior to April 1, 2021. However, they are responsible for notifying the plan of changes to their eligibility status.
- Employers, insurers, or plan administrators are required to issue several new notifications to impacted employees. This is in addition to standard COBRA notification requirements.
- Employers must pay the full cost of the COBRA premium, plus administrative fees. They will receive reimbursement in the form of a Medicare payroll tax credit.