American Rescue Plan Act of 2021 (ARPA) and COBRA Subsidy

ARPA includes 100% subsidy of COBRA continuation coverage premiums for a period of up to six months.

• Cobra premium subsidy is ONLY available to those employees who lost or will lose coverage due to involuntary termination[1] (other than gross misconduct) or involuntary reduction of hours between November 2019[2] and August 31, 2021[3] and are not eligible for other group health plan coverage or Medicare.

• Assistance eligible individuals include employees plus affected spouses and children.

• If individual chooses to enroll, individual DOES NOT have to pay COBRA premiums; COBRA premiums are to be paid by the employer, including 2% admin fee to be reimbursed via a payroll tax credit.

Follow this flowchart to find out who is eligible for COBRA premium subsidy.

CAUTION: Flowchart illustrates the Benefits Program Administrator’s interpretation of information provided from various resources. Further guidance is expected, including guidance regarding payroll tax credits, which may affect the information included in the flowchart.

[1] Guidance is expected to provide further clarification on the definition of involuntary termination.

[2] Employee terminated on or after November 1, 2019 will have at least one month of COBRA coverage during the subsidy period April 1, 2021 – September 31, 2021.

[3] Employee terminated after August 31, 2021 will be offered COBRA coverage starting October 1, 2021, which is outside the subsidy period.

Additional Information:

Alliant COBRA Subsidy Employer FAQ
Alliant webinar - Employer requirements under ARPA (April 15, 2021) - Recording - Presentation materials