During a pandemic, health insurance coverage becomes more important than ever. Unfortunately for those who suffered job loss or reduced hours as a result of the economic fallout over the past year, that much-needed health insurance coverage has posed a challenge for many Americans. The American Rescue Plan, passed by Congress and recently signed into law, takes aim at lost coverage by providing assistance with COBRA premiums.

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, gives workers and their families the ability to continue participation in an employer’s healthcare plan in the event of voluntary or involuntary job loss. The opportunity to continue one’s own healthcare plan is an important one, particularly at this time, but it comes at a cost. Those who find themselves suddenly unemployed often struggle with the cost of COBRA premiums, which can be significant without employer contributions.

That’s why the American Rescue Plan specifically addresses this need. The bill includes funding for a federal subsidy that covers 100 percent of the cost of COBRA premiums for those who have suffered involuntary termination or a reduction in hours. Qualified Beneficiaries (who have federal or state continuation of coverage rights) will pay nothing toward their COBRA premiums, with employers footing the bill upfront. Employers will then recover the cost of those premiums via a payroll tax credit.

These COBRA subsidies will be available from April through September, allowing for six months of much-needed healthcare coverage for the un- or under-employed. For more information on the this provision within the American Rescue Plan, contact our office. We will help you to determine whether you are eligible for COBRA subsidies, and how to receive this crucial assistance.