The Federal Government Provides Full COBRA Premium Assistance to More Eligible Workers
The COVID-19 pandemic has upended jobs and health care coverage for millions of people. As of May 2021, it is estimated that around 29.7 million people, including 7 million children, live in families where at least one individual did not have paid work because of unemployment or the pandemic. On April 1, 2021, an important healthcare subsidy became available under the American Rescue Plan Act (“ARPA”) of 2021 for employees who have lost their jobs. This law provides eligible individuals with a full subsidy for their COBRA premiums—or free COBRA health care—from April 1, 2021 through September 30, 2021.
Eligible individuals include employees who lose (or have lost) their healthcare coverage due to a reduction in hours or a job loss that was not voluntary. An employee may obtain the COBRA subsidy if they are eligible during any part of the six-month period between April 1, 2021 and September 30, 2021. The subsidy is also available to individuals who would have been entitled to COBRA during the six-month period, even if they did not initially elect COBRA coverage or discontinued COBRA before April 1, 2021. In the latter situation, an individual could be eligible for the subsidy if they were entitled to COBRA as far back as November 2019.
Under the law, eligible individuals must be provided notice of the availability of the new subsidy. Workers should look for a COBRA notice from their health plan, and contact their plan administrator with questions about their eligibility if they do not receive one. Individuals have sixty (60) days from the date of the notice to elect COBRA coverage, and ninety (90) days from the date of the notice to select a new plan, if permitted by their employer.
Since late August 2020, research reflects that 63 million adults (27% of all adults in the country) have found it difficult to cover usual household expenses such as food, rent or mortgage, and medical expenses. Adults in households with children were more likely to report difficulty paying for usual expenses: 34%, compared to 23% for adults without children. Further, Black and Latino adults reported difficulty covering expenses at higher rates: 42% and 38% respectively. We can see the potential impact of legislation like free COBRA health care provided under the ARPA when framed with these statistics.
For information about the COBRA subsidy, please contact your Trust Fund counsel.
Author: Ann Surapruik
