ARPA subsidies cover the full cost of COBRA or mini-COBRA premiums from April 1, 2021, through Sept. 30, 2021, for employees (and their qualifying family members), if the employee lost or loses group health insurance due to an involuntary job loss or reduction in work hours. The subsidy applies to people who are still within their original COBRA or mini-COBRA coverage period, for the length of that coverage period, even if they declined or dropped COBRA or mini-COBRA coverage earlier.
The subsidy does not apply to:
- Individuals whose job loss was voluntary or the result of gross misconduct; or
- Individuals who are eligible for another group health plan or Medicare.
The subsidies are funded through a payroll tax credit. Employers are required to provide new notices about the subsidy to employees. The U.S. Department of Labor (DOL) will issue model notices for this purpose.
The subsidy is generally available to people who elected COBRA, become eligible for COBRA, or declined or discontinued COBRA and are still within their original COBRA coverage period.
The subsidy is funded by a refundable, advanceable credit against payroll taxes taken by employers or carriers.
Option to Switch Coverage
The ARPA allows covered individuals to switch to similarly priced health coverage, if the employer allows it.
Employers should familiarize themselves with the provisions of the ARPA
and watch for agency guidance on its implementation.
April 1, 2021
ARPA 100% subsidy begins to cover COBRA premiums.
Sept. 30, 2021
ARPA subsidy provision for COBRA premiums expires.