As you might already know, the American Rescue Plan Act established subsidized COBRA coverage for employees who are otherwise eligible, from April 1 to September 30. In the wake of widespread unemployment, layoffs, or reduction in work hours, many Americans have lost their group healthcare benefits. While most would have been eligible for COBRA coverage during this time, the high cost of premiums often prevents them from enrolling.

Under the new policy, employers will be responsible for paying those premiums, which will then be repaid by the federal government in the form of a tax credit. And, as the employer, you are responsible for providing notice of employee eligibility to your health insurance company.

So, who is eligible?

• Those who were employed by you and covered by your group healthcare policy in the past 18 months, but separated from employment
• Those who are currently employed, and who were covered by the healthcare plan, but are no longer eligible due to reduced working hours
• The dependents of either of the above past or present employees
• Employees who were laid off or had their hours reduced.  Employees who voluntarily quit or resigned are NOT eligible for this benefit.

Your health insurance provider might have already contacted you regarding this information, but some are running behind due to the large volume of work accompanied by this change. It is important for you to be proactive in this process, and gather the necessary information so that you can quickly submit it by May 31. Then, all eligible past or present employees can be adequately notified of their coverage under the ARPA guidelines.

This coverage requirement is set to last through September 30, unless it is extended by future pandemic relief bills. For more information on your rights and responsibilities as an employer, contact us to discuss your situation. We can guide you through your options with regard to subsidized COBRA coverage, and help you understand your next steps.