New Federal Law Provides 100% COBRA Premium Subsidy to Eligible Individuals, Beginning April 1, 2021

Updated: April 13, 2021
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On March 11, 2021, President Biden signed into law the American Rescue Plan Act, a sweeping $1.9 trillion relief bill aimed at hastening the U.S. recovery from the COVID-19 pandemic and its economic fallout. Included in the package is the provision of a COBRA premium subsidy that will pay 100% of the COBRA premiums for eligible participants and dependents from April 1, 2021 to September 30, 2021. Here’s what you need to know….

Who is eligible for the COBRA premium subsidy?
Participants and dependents qualify for free COBRA if they lose Health Plan coverage due to a reduction of hours or involuntary termination of employment.  This free COBRA is available for periods of coverage between April 1, 2021 through September 30, 2021.

You will qualify for free COBRA coverage if you:

  • Are currently enrolled in COBRA or become eligible for COBRA between April 1, 2021 and September 30, 2021; or
  • Became eligible for COBRA prior to April 1, 2021, and your COBRA eligibility period includes any month between April 1, 2021 and September 30, 2021 — even if you previously declined COBRA coverage or decided to discontinue it before April 1, 2021.

Who is NOT eligible for the COBRA premium subsidy? 
You will not be eligible for free COBRA premium subsidy if you:

  • Are eligible for other group health coverage, such as through a new employer’s plan or a spouse’s plan (with some limited exceptions);
  • Are eligible for Medicare; or
  • Lost coverage due to divorce, aging out of coverage, or any other qualifying event other than an involuntary termination or reduction in hours.

How long will the COBRA premium subsidy be available? 
Currently, the maximum subsidy period is six months — from April 1, 2021 to September 30, 2021.  Your subsidy period will end earlier, however, if:

  • The maximum period of COBRA coverage (generally 18 months) ends earlier than September 30, 2021; or
  • You become eligible for coverage under another group health plan or Medicare.

NOTE: Individuals receiving free COBRA must notify the Health Plan if they become eligible for coverage under another group health plan or Medicare.  Failure to do so can result in a tax penalty.

What will the COBRA premium subsidy provide?
The COBRA premium subsidy will provide free COBRA coverage for eligible participants and dependents from April 1, 2021 to September 30, 2021.

If I previously chose not to elect COBRA coverage, will I be eligible for the subsidy?
If you: (1) previously qualified for COBRA as a result of involuntary termination or a reduction in hours; (2) do not have coverage under another group health plan or Medicare; and (3) have a COBRA coverage period that includes any months between April 2021 and September 2021, you are eligible for free COBRA coverage for such months.

What happens next?
The Health Plan will be reaching out to eligible participants and dependents soon with more details on how to enroll.

If you are interested in enrolling in free COBRA, you do not need to do anything further for now.  You should wait for the required notices and election forms from the Health Plan, which will be sent to shortly. Once you receive the forms, you will need to complete and return them to the Health Plan.  Your free COBRA coverage will become effective retroactive to April 1, 2021, once the Health Plan is able to process your enrollment materials.

If you need to ensure that your COBRA coverage is effective April 1, 2021 without interruption or delay, please contact the Health Plan as soon as possible.

The Health Plan will also post updates on as new information becomes available. For additional assistance, you can speak to a Participant Services representative at (323) 866-2200, Ext. 502 or toll free at (877) 866-2200, Ext. 502.