American Rescue Plan Act State Continuation

On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed by President Biden and includes a provision for a COBRA continuation coverage premium subsidy of 100% for individuals and families who experienced involuntary job loss or a reduction in hours of work leading to a loss in coverage.

This subsidy will be available for assistance eligible individuals (AEIs), as defined under the Act, from April 1, 2021 through September 30, 2021.

Federal COBRA1 participants must meet the below criteria to be an assistance eligible individual (AEI):

  • Coverage was lost due to reduction in hours or involuntary job loss.
  • The COBRA participant is still within the COBRA eligibility period as of April 1, 2021 or elected COBRA and discontinued it prior to April 1, 2021.
  • Eligible COBRA participants who do not have an election in place will have the opportunity to elect coverage during an Extended Election Period and will be able to take advantage of the subsidy effective April 1, 2021.  This will be referred to as the "lookback period" in determining member eligibility.
  • COBRA elected under the ARPA will start on or after April 1, 2021 and may go through September 30, 2021. 
  • The ARPA will not extend the normal 18-month period of COBRA continuation coverage in the case of job loss or a reduction in hours.
  • Eligible COBRA participants who have an election in place as of April 1, 2021 will be able to take advantage of the subsidy effective April 1, 2021.
  • Eligible COBRA participants who become eligible for COBRA continuation coverage on or after April 1, 2021 will be eligible for the subsidy while it is in effect.

Communications

Footnotes

  1. Important: State continuation (SC) laws vary from state to state and by funding type. Assistance eligible individuals (AEIs) may receive subsidized coverage from April 1 through September 30. Because state continuation laws do vary by state, please talk to your plan administrator for additional information.