What Employers and Employees Need to Know About COBRA Premium Subsidies
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 11, 2021. One of the significant COVID-19 relief provisions in the bill includes a 100 percent COBRA premium subsidy so eligible individuals can continue getting health insurance for up to six months. Employers will be required to pay the COBRA premiums and be eligible for tax credits to recoup the costs. The subsidy is available beginning April 1, 2021, and ends September 30, 2021.
Below is an overview from the team at Barnes & Thornburg. The full article is available Here.
Immediate COBRA Premium Subsidy Kicks In April 1 For Involuntarily Terminated Or Reduced Hour Employees
Employees covered by a group health plan who lose coverage due to involuntarily termination of employment (without gross misconduct) or an involuntary reduction in hours may be eligible for a COBRA premium subsidy for up to six months.
The employers who pay the COBRA premium subsidy receive a tax credit for the subsidies as part of American Rescue Plan Act.
New notices are required in some instances as soon as May 30, 2021.
The Barnes & Thornburg Article contains detailed information on the following:
- COBRA Premium Assistance Eligibility
- Type of Group Health Plan Coverage
- Required Notices
- Tax Credit for COBRA Premium Subsidy
- Recommended Action Steps