The Federal American Rescue Plan Act of 2021 (ARPA) was passed by Congress and signed into law in mid-March. It allows for a COBRA premium subsidy and an extended election period for assistance eligible individuals (AEIs). Those eligible for continuation of coverage under COBRA or Cal-COBRA since November 1, 2019, are eligible for the subsidy if the qualifying event was involuntary termination or reduction of hours. The premium subsidy is for health coverage from April 1, 2021-September 30, 2021.
Employers who are subject to Federal COBRA:
Under this Act, it is the responsibility of the employer to pay the full premium on behalf of the COBRA participant and then take the credit of the same amount on their payroll taxes. These employers may also offer other health plan options to the eligible participant (if they offer multiple plan options).
Employers need to notify AEIs of this premium assistance and provide the option to enroll in another health plan, as long as the cost of the coverage does not exceed the cost of the current coverage. Federal model notices are now available, please see Department of Labor links (below).
AEIs not currently enrolled in continuation coverage as of April 1st, and AEIs who previously elected coverage but discontinued before April 1st, may elect COBRA up to 60 days after they receive the notice from the employer of the premium subsidy availability.
Note: Employers should consult with their legal counsel or tax advisor to fully understand their responsibility specified in ARPA.
Small employers who are subject to Cal-COBRA:
WHA notified current Cal-COBRA participants, as well as those who could be eligible for the premium subsidy (potential AEIs), of the premium assistance availability. These individuals will need to complete and return the Request for Treatment as an Assistance Eligible Individual form along with an Election Form in order for WHA to determine their qualification, which may also be verified with the employer.
Note for Brokers: have your clients check on subsidy status. With new funding available, they could be saving money.
WHA support for employers:
The following tools are available to employers, so you may:
- Request a roster of current COBRA (or CalCOBRA) participants, including premium amounts. Employers can request this list by contacting WHA Premium Billing.
- View roster of current participants in WHA’s employer portal under “Manage Enrollment-View Member Roster”. Note: this does not show the balance due or premium amounts.
- Request a list of recently terminated employees directly from WHA Sales.
The Department of Labor released guidance and model notices that determine how the COBRA subsidies will be administered. Visit DOL's Employee Benefits Security Administration for information on the following:
- COBRA Premium Subsidy dedicated pages
- For additional questions, contact your designated Account Manager (916.563.3198 / 888.499.3198) or Premium Billing/Enrollment department (916.563.2206)
- If you are a WHA member and seeking more information about the subsidy that may be available to you, please contact your employer or call WHA member services (916.563.2250 / 888.563.2250).