April 07, 2021 

Set out below are Fre­quent­ly Asked Ques­tions (FAQs) regard­ing imple­men­ta­tion of cer­tain pro­vi­sions of the Amer­i­can Res­cue Plan Act of 2021 (ARP), as it applies to the Con­sol­i­dat­ed Omnibus Bud­get Rec­on­cil­i­a­tion Act of 1985, com­mon­ly called COBRA. These FAQs have been pre­pared by the Depart­ment of Labor (DOL). Like pre­vi­ous­ly issued FAQs (avail­able at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs), these FAQs answer ques­tions from stake­hold­ers to help indi­vid­u­als under­stand the law and ben­e­fit from it, as intend­ed. The Depart­ment of the Trea­sury and the Inter­nal Rev­enue Ser­vice (IRS) have reviewed these FAQs, and, con­cur in the appli­ca­tion of the laws under their juris­dic­tion as set forth in these FAQs.

COBRA Con­tin­u­a­tion Coverage

COBRA con­tin­u­a­tion cov­er­age pro­vides cer­tain group health plan con­tin­u­a­tion cov­er­age rights for par­tic­i­pants and ben­e­fi­cia­ries cov­ered by a group health plan. In gen­er­al, under COBRA, an indi­vid­ual who was cov­ered by a group health plan on the day before the occur­rence of a qual­i­fy­ing event (such as a ter­mi­na­tion of employ­ment or a reduc­tion in hours that caus­es loss of cov­er­age under the plan) may be able to elect COBRA con­tin­u­a­tion cov­er­age upon that qual­i­fy­ing event. [1]  Indi­vid­u­als with such a right are referred to as qual­i­fied ben­e­fi­cia­ries. Under COBRA, group health plans must pro­vide cov­ered employ­ees and their fam­i­lies with cer­tain notices explain­ing their COBRA rights.

ARP COBRA Pre­mi­um Assistance 

Sec­tion 9501 of the ARP pro­vides for COBRA pre­mi­um assis­tance to help Assis­tance Eli­gi­ble Indi­vid­u­als (as defined below in Q3) con­tin­ue their health ben­e­fits. The pre­mi­um assis­tance is also avail­able for con­tin­u­a­tion cov­er­age under cer­tain State laws. Assis­tance Eli­gi­ble Indi­vid­u­als are not required to pay their COBRA con­tin­u­a­tion cov­er­age pre­mi­ums. The pre­mi­um assis­tance applies to peri­ods of health cov­er­age on or after April 1, 2021 through Sep­tem­ber 30, 2021. An employ­er or plan to whom COBRA pre­mi­ums are payable is enti­tled to a tax cred­it for the amount of the pre­mi­um assistance.

Gen­er­al Information 

Q1: I have heard that the ARP includ­ed tem­po­rary COBRA pre­mi­um assis­tance to pay for health cov­er­age. I would like more information. 

The ARP pro­vides tem­po­rary pre­mi­um assis­tance for COBRA con­tin­u­a­tion cov­er­age for Assis­tance Eli­gi­ble Indi­vid­u­als (see Q3 to deter­mine if you are eli­gi­ble). COBRA allows cer­tain peo­ple to extend employ­ment-based group health plan cov­er­age, if they would oth­er­wise lose the cov­er­age due to cer­tain life events such as loss of a job.

Indi­vid­u­als may be eli­gi­ble for pre­mi­um assis­tance if they are eli­gi­ble for and elect COBRA con­tin­u­a­tion cov­er­age because of their own or a fam­i­ly member’s reduc­tion in hours or an invol­un­tary ter­mi­na­tion from employ­ment. This pre­mi­um assis­tance is avail­able for peri­ods of cov­er­age from April 1, 2021 through Sep­tem­ber 30, 2021. This pre­mi­um assis­tance is gen­er­al­ly avail­able for con­tin­u­a­tion cov­er­age under the Fed­er­al COBRA pro­vi­sions, as well as for group health insur­ance cov­er­age under com­pa­ra­ble state con­tin­u­a­tion cov­er­age (“mini-COBRA”) laws.

If you were offered Fed­er­al COBRA con­tin­u­a­tion cov­er­age as a result of a reduc­tion in hours or an invol­un­tary ter­mi­na­tion of employ­ment, and you declined to take COBRA con­tin­u­a­tion cov­er­age at that time, or you elect­ed Fed­er­al COBRA con­tin­u­a­tion cov­er­age and lat­er dis­con­tin­ued it, you may have anoth­er oppor­tu­ni­ty to elect COBRA con­tin­u­a­tion cov­er­age and receive the pre­mi­um assis­tance, if the max­i­mum peri­od you would have been eli­gi­ble for COBRA con­tin­u­a­tion cov­er­age has not yet expired (if COBRA con­tin­u­a­tion cov­er­age had been elect­ed or not discontinued).

Q2: Which plans does the pre­mi­um assis­tance apply to? 

The COBRA pre­mi­um assis­tance pro­vi­sions apply to all group health plans spon­sored by pri­vate-sec­tor employ­ers or employ­ee orga­ni­za­tions (unions) sub­ject to the COBRA rules under the Employ­ee Retire­ment Income Secu­ri­ty Act of 1974 (ERISA). They also apply to plans spon­sored by State or local gov­ern­ments sub­ject to the con­tin­u­a­tion pro­vi­sions under the Pub­lic Health Ser­vice Act. The pre­mi­um assis­tance is also avail­able for group health insur­ance required under state mini-COBRA laws. Q3: How can I tell if I am eli­gi­ble to receive the COBRA pre­mi­um assis­tance? The ARP makes the pre­mi­um assis­tance avail­able for “Assis­tance Eli­gi­ble Indi­vid­u­als.” An Assis­tance Eli­gi­ble Indi­vid­ual is a COBRA qual­i­fied ben­e­fi­cia­ry who meets the fol­low­ing require­ments dur­ing the peri­od from April 1, 2021 through Sep­tem­ber 30, 2021:

  • Is eli­gi­ble for COBRA con­tin­u­a­tion cov­er­age by rea­son of a qual­i­fy­ing event that is a reduc­tion in hours (such as reduced hours due to change in a business’s hours of oper­a­tions, a change from full-time to part-time sta­tus, tak­ing of a tem­po­rary leave of absence, or an individual’s par­tic­i­pa­tion in a law­ful labor strike, as long as the indi­vid­ual remains an employ­ee at the time that hours are reduced) or an invol­un­tary ter­mi­na­tion of employ­ment (not includ­ing a vol­un­tary ter­mi­na­tion); and
  • Elects COBRA con­tin­u­a­tion coverage.

How­ev­er, you are not eli­gi­ble for the pre­mi­um assis­tance if you are eli­gi­ble for oth­er group health cov­er­age, such as through a new employer’s plan or a spouse’s plan (not includ­ing except­ed ben­e­fits, a qual­i­fied small employ­er health reim­burse­ment arrange­ment (QSEHRA), or a health flex­i­ble spend­ing arrange­ment (FSA)), or if you are eli­gi­ble for Medicare. Note that if you have indi­vid­ual health insur­ance cov­er­age, like a plan through the Health Insur­ance Mar­ket­place®[2]  , or if you have Med­ic­aid, you may be eli­gi­ble for ARP pre­mi­um assis­tance. How­ev­er, if you elect to enroll in COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance, you will no longer be eli­gi­ble for a pre­mi­um tax cred­it, advance pay­ments of the pre­mi­um tax cred­it, or the health insur­ance tax cred­it for your health cov­er­age dur­ing that period.

Note: If the employee’s ter­mi­na­tion of employ­ment was for gross mis­con­duct, the employ­ee and any depen­dents would not qual­i­fy for COBRA con­tin­u­a­tion cov­er­age or the pre­mi­um assistance.

Q4: If I am eli­gi­ble for the pre­mi­um assis­tance, how long will it last? 

Your pre­mi­um assis­tance can last from April 1, 2021 through Sep­tem­ber 30, 2021. How­ev­er, it will end ear­li­er if:

  • You become eli­gi­ble for anoth­er group health plan, such as a plan spon­sored by a new employ­er or a spouse’s employ­er (not includ­ing except­ed ben­e­fits, a QSEHRA, or a health FSA), or you become eli­gi­ble for Medicare**, or
  • You reach the end of your max­i­mum COBRA con­tin­u­a­tion cov­er­age period.

If you con­tin­ue your COBRA con­tin­u­a­tion cov­er­age after the pre­mi­um assis­tance peri­od, you may have to pay the full amount of the pre­mi­um oth­er­wise due. Fail­ure to do so may result in your loss of COBRA con­tin­u­a­tion cov­er­age. Con­tact your plan admin­is­tra­tor, employ­er spon­sor­ing the plan, or health insur­ance issuer for more information.

When your COBRA pre­mi­um assis­tance ends, you may be eli­gi­ble for Med­ic­aid or a spe­cial enroll­ment peri­od to enroll in cov­er­age through the Health Insur­ance Mar­ket­place® or to enroll in indi­vid­ual mar­ket health insur­ance cov­er­age out­side of the Mar­ket­place. A spe­cial enroll­ment peri­od is also avail­able when you reach the end of your max­i­mum COBRA cov­er­age peri­od. You may apply for and, if eli­gi­ble, enroll in Med­ic­aid cov­er­age at any time. For more infor­ma­tion, go to: https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/.

**Indi­vid­u­als receiv­ing the COBRA pre­mi­um assis­tance must noti­fy their plans if they become eli­gi­ble for cov­er­age under anoth­er group health plan (not includ­ing except­ed ben­e­fits, a QSEHRA, or a health FSA), or for Medicare. Fail­ure to do so can result in a tax penalty.

Q5: Who is eli­gi­ble for an addi­tion­al elec­tion oppor­tu­ni­ty for COBRA con­tin­u­a­tion coverage? 

A qual­i­fied ben­e­fi­cia­ry whose qual­i­fy­ing event was a reduc­tion in hours or an invol­un­tary ter­mi­na­tion of employ­ment pri­or to April 1, 2021 and who did not elect COBRA con­tin­u­a­tion cov­er­age when it was first offered pri­or to that date or who elect­ed COBRA con­tin­u­a­tion cov­er­age but is no longer enrolled (for exam­ple, an indi­vid­ual who dropped COBRA con­tin­u­a­tion cov­er­age because he or she was unable to con­tin­ue pay­ing the pre­mi­um) may have an addi­tion­al elec­tion oppor­tu­ni­ty at this time. Indi­vid­u­als eli­gi­ble for this addi­tion­al COBRA elec­tion peri­od must receive a notice of extend­ed COBRA elec­tion peri­od inform­ing them of this oppor­tu­ni­ty. This notice must be pro­vid­ed with­in 60 days of the first day of the first month begin­ning after the date of the enact­ment of the ARP (so, by May 31, 2021) and indi­vid­u­als have 60 days after the notice is pro­vid­ed to elect COBRA. How­ev­er, this addi­tion­al elec­tion peri­od does not extend the peri­od of COBRA con­tin­u­a­tion cov­er­age beyond the orig­i­nal max­i­mum peri­od (gen­er­al­ly 18 months from the employ­ee’s reduc­tion in hours or invol­un­tary ter­mi­na­tion). COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance elect­ed in this addi­tion­al elec­tion peri­od begins with the first peri­od of cov­er­age begin­ning on or after April 1, 2021. Indi­vid­u­als can begin their cov­er­age prospec­tive­ly from the date of their elec­tion, or, if an indi­vid­ual has a qual­i­fy­ing event on or before April 1st, choose to start their cov­er­age as of April 1st, even if the indi­vid­ual receives an elec­tion notice and makes such elec­tion at a lat­er date. In either case, please note that the pre­mi­um assis­tance is only avail­able for peri­ods of cov­er­age from April 1, 2021 through Sep­tem­ber 30,2021.

Due to the COVID-19 Nation­al Emer­gency, the DOL, the Depart­ment of the Trea­sury, and the IRS issued a Notice of Exten­sion of Cer­tain Time­frames for Employ­ee Ben­e­fit Plans, Par­tic­i­pants, and Ben­e­fi­cia­ries Affect­ed by the COVID–19 Out­break (“Joint Notice”).[3]  This notice pro­vid­ed relief for cer­tain actions relat­ed to employ­ee ben­e­fit plans required or per­mit­ted under Title I of ERISA and the Code, includ­ing the 60-day ini­tial elec­tion peri­od for COBRA con­tin­u­a­tion cov­er­age. The DOL’s Employ­ee Ben­e­fits Secu­ri­ty Admin­is­tra­tion (EBSA) pro­vid­ed fur­ther guid­ance on this relief in EBSA Dis­as­ter Relief Notice 2021-01. [4]  This extend­ed dead­line relief pro­vid­ed in the Joint Notice and Notice 2021-01 does not apply, how­ev­er, to the 60-day notice or elec­tion peri­ods relat­ed to COBRA pre­mi­um assis­tance under the ARP.

Q6: Does the ARP change any State pro­gram require­ments or time peri­ods for elec­tion of con­tin­u­a­tion coverage? 

No. The ARP does not change any require­ment of a State con­tin­u­a­tion cov­er­age pro­gram. The ARP only allows Assis­tance Eli­gi­ble Indi­vid­u­als who elect con­tin­u­a­tion cov­er­age under State insur­ance law to receive pre­mi­um assis­tance from April 1, 2021 through Sep­tem­ber 30, 2021. It also allows Assis­tance Eli­gi­ble Indi­vid­u­als to switch to oth­er cov­er­age offered to sim­i­lar­ly sit­u­at­ed active employ­ees if the plan allows it, pro­vid­ed that the new cov­er­age is no more expen­sive than the pri­or cov­er­age. See Q15 and Q17 for more information.

Pre­mi­ums

Q7: How do I apply for the pre­mi­um assistance? 

If you were cov­ered by an employ­ment-based group health plan on the last day of your employ­ment or a fam­i­ly member’s employ­ment (or the last day before your or your fam­i­ly member’s reduc­tion in hours caus­ing a loss of cov­er­age), the plan or issuer should pro­vide you and your ben­e­fi­cia­ries with a notice of your eli­gi­bil­i­ty to elect COBRA con­tin­u­a­tion cov­er­age and to receive the pre­mi­um assis­tance. The notice should include any forms nec­es­sary for enroll­ment, includ­ing forms to indi­cate that you are an Assis­tance Eli­gi­ble Indi­vid­ual and that you are not eli­gi­ble for anoth­er group health plan (this does not include except­ed ben­e­fits, a QSEHRA, or a health FSA), or eli­gi­ble for Medicare.

If you believe you are (or may be, upon a COBRA elec­tion) an Assis­tance Eli­gi­ble Indi­vid­ual and have not received a notice from your employ­er, you may noti­fy your employ­er of your request for treat­ment as an Assis­tance Eli­gi­ble Indi­vid­ual (for exam­ple, using the “Request for Treat­ment as an Assis­tance Eli­gi­ble Indi­vid­ual Form” that is attached to the Sum­ma­ry of COBRA Pre­mi­um Assis­tance Pro­vi­sions under the Amer­i­can Res­cue Plan Act of 2021) for peri­ods of cov­er­age start­ing April 1, 2021. If you are an Assis­tance Eli­gi­ble Indi­vid­ual, the ARP pro­vides that you must be treat­ed, for pur­pos­es of COBRA, as hav­ing paid in full the amount of such pre­mi­um from April 1, 2021 through Sep­tem­ber 30, 2021. [5]  Accord­ing­ly, plans and issuers should not col­lect pre­mi­um pay­ments from Assis­tance Eli­gi­ble Indi­vid­u­als and sub­se­quent­ly require them to seek reim­burse­ment of the pre­mi­ums for peri­ods of cov­er­age begin­ning on or after April 1, 2021, and pre­ced­ing the date on which an employ­er sends an elec­tion notice, if an indi­vid­ual has made an appro­pri­ate request for such treat­ment. You should con­tact your plan or issuer direct­ly to ask about tak­ing advan­tage of the pre­mi­um assistance.

Q8: How will the pre­mi­um assis­tance be pro­vid­ed to me? 

You will not receive a pay­ment of the pre­mi­um assis­tance. Instead, Assis­tance Eli­gi­ble Indi­vid­u­als do not have to pay any of the COBRA pre­mi­um for the peri­od of cov­er­age from April 1, 2021 through Sep­tem­ber 30, 2021. The pre­mi­um is reim­bursed direct­ly to the employ­er, plan admin­is­tra­tor, or insur­ance com­pa­ny through a COBRA pre­mi­um assis­tance credit.

Q9: Am I required to pay any admin­is­tra­tive fees? 

If you are an Assis­tance Eli­gi­ble Indi­vid­ual, you will not need to pay any part of what you would oth­er­wise pay for your COBRA con­tin­u­a­tion cov­er­age, includ­ing any admin­is­tra­tion fee that would oth­er­wise be charged.

Notices

Q10: Does the ARP impose any new notice requirements? 

Yes, plans and issuers are required to noti­fy qual­i­fied ben­e­fi­cia­ries regard­ing the pre­mi­um assis­tance and oth­er infor­ma­tion about their rights under the ARP, as follows:

  • A gen­er­al notice to all qual­i­fied ben­e­fi­cia­ries who have a qual­i­fy­ing event that is a reduc­tion in hours or an invol­un­tary ter­mi­na­tion of employ­ment from April 1, 2021 through Sep­tem­ber 30, 2021. This notice may be pro­vid­ed sep­a­rate­ly or with the COBRA elec­tion notice fol­low­ing a COBRA qual­i­fy­ing event.
  • A notice of the extend­ed COBRA elec­tion peri­od to any Assis­tance Eli­gi­ble Indi­vid­ual (or any indi­vid­ual who would be an Assis­tance Eli­gi­ble Indi­vid­ual if a COBRA con­tin­u­a­tion cov­er­age elec­tion were in effect) who had a qual­i­fy­ing event before April 1, 2021. This require­ment does not include those indi­vid­u­als whose max­i­mum COBRA con­tin­u­a­tion cov­er­age peri­od, if COBRA had been elect­ed or not dis­con­tin­ued, would have end­ed before April 1, 2021 (gen­er­al­ly, those with applic­a­ble qual­i­fy­ing events before Octo­ber 1, 2019). This notice must be pro­vid­ed with­in 60 days fol­low­ing April 1, 2021 (that is, by May 31, 2021).

The ARP also requires that plans and issuers pro­vide indi­vid­u­als with a notice of expi­ra­tion of peri­ods of pre­mi­um assis­tance explain­ing that the pre­mi­um assis­tance for the indi­vid­ual will expire soon, the date of the expi­ra­tion, and that the indi­vid­ual may be eli­gi­ble for cov­er­age with­out any pre­mi­um assis­tance through COBRA con­tin­u­a­tion cov­er­age or cov­er­age under a group health plan. Cov­er­age may also be avail­able through Med­ic­aid or the Health Insur­ance Mar­ket­place®. This notice must be pro­vid­ed 15 — 45 days before the individual’s pre­mi­um assis­tance expires.

Unless specif­i­cal­ly mod­i­fied by the ARP, the exist­ing require­ments for the man­ner and tim­ing of COBRA notices con­tin­ue to apply. Due to the COVID-19 Nation­al Emer­gency, DOL, the Depart­ment of the Trea­sury, and the IRS issued guid­ance extend­ing time­frames for cer­tain actions relat­ed to health cov­er­age under pri­vate-sec­tor employ­ment-based group health plans. [6] The exten­sions under the Joint Notice and EBSA Dis­as­ter Relief Notice 2021-01 do not apply, how­ev­er, to the notices or the elec­tion peri­ods relat­ed to COBRA pre­mi­um assi­tance avail­able under the ARP. There­fore, plans and issuers must pro­vide the notices accord­ing to the time­frames spec­i­fied in the ARP (out­lined above).

DOL is com­mit­ted to ensur­ing that indi­vid­u­als receive the ben­e­fits to which they are enti­tled under the ARP. Employ­ers or mul­ti­em­ploy­er plans may also be sub­ject to an excise tax under the Inter­nal Rev­enue Code for fail­ing to sat­is­fy the COBRA con­tin­u­a­tion cov­er­age require­ments. This tax could be as much as $100 per qual­i­fied ben­e­fi­cia­ry, but not more than $200 per fam­i­ly, for each day that the tax­pay­er is in vio­la­tion of the COBRA rules.

Q11: What infor­ma­tion must the notices include? 

The notices must include the fol­low­ing information:

  • The forms nec­es­sary for estab­lish­ing eli­gi­bil­i­ty for the pre­mi­um assistance;
  • Con­tact infor­ma­tion for the plan admin­is­tra­tor or oth­er per­son main­tain­ing rel­e­vant infor­ma­tion in con­nec­tion with the pre­mi­um assistance;
  • A descrip­tion of the addi­tion­al elec­tion peri­od (if applic­a­ble to the individual);
  • A descrip­tion of the require­ment that the Assis­tance Eli­gi­ble Indi­vid­ual noti­fy the plan when he/she becomes eli­gi­ble for cov­er­age under anoth­er group health plan (not includ­ing except­ed ben­e­fits, a QSEHRA, or a health FSA), or eli­gi­ble for Medicare and the penal­ty for fail­ing to do so;
  • A descrip­tion of the right to receive the pre­mi­um assis­tance and the con­di­tions for enti­tle­ment; and
  • If offered by the employ­er, a descrip­tion of the option to enroll in a dif­fer­ent cov­er­age option avail­able under the plan

Q12: Will there be mod­el notices? 

Yes. DOL has devel­oped mod­el notices that are avail­able at https://www.dol.gov/cobra-subsidy.

Indi­vid­ual Ques­tions For Employ­ees And Their Families 

Q13: How much time do I have to enroll in COBRA con­tin­u­a­tion coverage? 

In gen­er­al, indi­vid­u­als who are eli­gi­ble for COBRA con­tin­u­a­tion cov­er­age have 60 days after the date that they ini­tial­ly receive their COBRA elec­tion notice to elect COBRA con­tin­u­a­tion cov­er­age. Due to the COVID-19 Nation­al Emer­gency, DOL, the Depart­ment of the Trea­sury, and the IRS issued guid­ance extend­ing time­frames for cer­tain actions relat­ed to health cov­er­age under pri­vate-sec­tor employ­ment-based group health plans. The exten­sions under the the Joint Notice and EBSA Dis­as­ter Relief Notice 2021-01 do not apply, how­ev­er, to the notices or elec­tions relat­ed to COBRA pre­mi­um assis­tance avail­able under the ARP. Poten­tial Assis­tance Eli­gi­ble Indi­vid­u­als there­fore must elect COBRA con­tin­u­a­tion cov­er­age with­in 60 days of receipt of the rel­e­vant notice or for­feit their right to elect COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance. [7] Sim­il­iar­ly, plans and issuers must pro­vide the notices required under the ARP with­in the time­frame required by the ARP.

Assis­tance Eli­gi­ble Indi­vid­u­als do not need to send any pay­ments for the COBRA con­tin­u­a­tion cov­er­age dur­ing the pre­mi­um assis­tance peri­od. For addi­tion­al infor­ma­tion about this guid­ance vis­it: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-andcompliance/disaster-relief.

Q14: I am an Assis­tance Eli­gi­ble Indi­vid­ual who has been enrolled in COBRA con­tin­u­a­tion cov­er­age since Decem­ber 2020. Will I receive a refund of the pre­mi­ums that I have already paid?

No. The COBRA pre­mi­um assis­tance pro­vi­sions in the ARP apply only to pre­mi­ums for cov­er­age peri­ods from April 1, 2021 through Sep­tem­ber 30, 2021. If you were eli­gi­ble for pre­mi­um assis­tance, but paid in full for peri­ods of COBRA con­tin­u­a­tion cov­er­age begin­ning on or after April 1, 2021 through Sep­tem­ber 30, 2021, you should con­tact the plan admin­is­tra­tor or employ­er spon­sor­ing the plan to dis­cuss a cred­it against future pay­ments (or a refund in cer­tain circumstances).

Q15: I am cur­rent­ly enrolled in COBRA con­tin­u­a­tion cov­er­age, but I would like to switch to a dif­fer­ent cov­er­age option offered by the same employ­er. Can I do this?

Group health plans can choose to allow qual­i­fied ben­e­fi­cia­ries to enroll in cov­er­age that is dif­fer­ent from the cov­er­age they had at the time of the COBRA qual­i­fy­ing event. The ARP pro­vides that chang­ing cov­er­age will not cause an indi­vid­ual to be inel­i­gi­ble for the COBRA pre­mi­um assis­tance, pro­vid­ed that:

  • The COBRA pre­mi­um charged for the dif­fer­ent cov­er­age is the same or low­er than for the cov­er­age the indi­vid­ual had at the time of the qual­i­fy­ing event;
  • The dif­fer­ent cov­er­age is also offered to sim­i­lar­ly sit­u­at­ed active employ­ees; and
  • The dif­fer­ent cov­er­age is not lim­it­ed to only except­ed ben­e­fits, a QSEHRA, or a health FSA.

If the plan per­mits indi­vid­u­als to change cov­er­age options, the plan must pro­vide the indi­vid­u­als with a notice of their oppor­tu­ni­ty to do so. Indi­vid­u­als have 90 days to elect to change their cov­er­age after the notice is provided.

Q16: Only part of my fam­i­ly elect­ed COBRA con­tin­u­a­tion cov­er­age but all of us were eli­gi­ble. Can I enroll the oth­ers and take advan­tage of the pre­mi­um assistance? 

Each COBRA qual­i­fied ben­e­fi­cia­ry may inde­pen­dent­ly elect COBRA con­tin­u­a­tion cov­er­age. If a fam­i­ly mem­ber did not elect COBRA con­tin­u­a­tion cov­er­age when first eli­gi­ble and that indi­vid­ual would be an Assis­tance Eli­gi­ble Indi­vid­ual, that indi­vid­ual has an addi­tion­al oppor­tu­ni­ty to enroll and qual­i­fy for the pre­mi­um assis­tance. How­ev­er, this extend­ed elec­tion peri­od does not extend the max­i­mum peri­od of COBRA con­tin­u­a­tion cov­er­age had COBRA con­tin­u­a­tion cov­er­age been orig­i­nal­ly elect­ed. See Q3 and Q5 above for more information.

Q17: I received my COBRA elec­tion notice. Can I change my cov­er­age option from the one I had previously? 

In gen­er­al, COBRA con­tin­u­a­tion cov­er­age pro­vides the same cov­er­age that the indi­vid­ual had at the time of the qual­i­fy­ing event. How­ev­er, under the ARP, a plan may offer Assis­tance Eli­gi­ble Indi­vid­u­als the option of choos­ing oth­er cov­er­age that is also offered to sim­i­lar­ly sit­u­at­ed active employ­ees and that does not have high­er pre­mi­ums than the cov­er­age the indi­vid­ual had at the time of the qual­i­fy­ing event. See Q15 for more information.

Q18: I am cur­rent­ly enrolled in indi­vid­ual mar­ket health insur­ance cov­er­age, but I am poten­tial­ly an Assis­tance Eli­gi­ble Indi­vid­ual. Can I switch to COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assistance? 

Yes, Poten­tial Assis­tance Eli­gi­ble Indi­vid­u­als can use the elec­tion peri­od to change from indi­vid­ual mar­ket health insur­ance cov­er­age (that they got either through a Health Insur­ance Mar­ket­place®, such as through HealthCare.gov, or out­side of the Mar­ket­place) to COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance. Addi­tion­al­ly, you may apply for and, if eli­gi­ble 9 enroll in Med­ic­aid at any time. If you elect to enroll in COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance, you will no longer be eli­gi­ble for a pre­mi­um tax cred­it, or advance pay­ments of the pre­mi­um tax cred­it, for Mar­ket­place cov­er­age you oth­er­wise would qual­i­fy for dur­ing this pre­mi­um assis­tance peri­od. You must con­tact the Mar­ket­place to let them know that you’ve enrolled in oth­er min­i­mum essen­tial cov­er­age or you may have to repay some or all of the advance pay­ments of the pre­mi­um tax cred­it made on your behalf dur­ing the peri­od you were enrolled in both COBRA con­tin­u­a­tion cov­er­age and Mar­ket­place cov­er­age. This repay­ment would be required when fil­ing your income tax return for 2021 (see addi­tion­al infor­ma­tion about con­tact­ing the Mar­ket­place below).

Q19: Can I end my indi­vid­ual health insur­ance cov­er­age retroac­tive­ly if I can qual­i­fy for COBRA with pre­mi­um assis­tance start­ing on April 1? 

Enrollees gen­er­al­ly are not per­mit­ted to ter­mi­nate cov­er­age pur­chased through a Mar­ket­place retroac­tive­ly. You must do so prospec­tive­ly. If you want to end cov­er­age that you got from a Health Insur­ance Mar­ket­place®, such as on HealthCare.gov, because you want to change to COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance, you must update your Mar­ket­place appli­ca­tion or call the Mar­ket­place to do so. If you enrolled in cov­er­age through HealthCare.gov, you can call 1–800-318‑2596 (TTY: 1–855-889‑4325). If your state has its own Mar­ket­place plat­form, find con­tact infor­ma­tion for your State Mar­ket­place here: https://www.healthcare.gov/marketplace-in-your-state/.

If you want to end indi­vid­ual health insur­ance cov­er­age that you got out­side of a Mar­ket­place, such as direct­ly from an insur­ance com­pa­ny, you must con­tact the insur­ance com­pa­ny to do so.

Q20: What should I con­sid­er when mak­ing a deci­sion whether to con­tin­ue with indi­vid­ual mar­ket health insur­ance cov­er­age or change to COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assistance? 

You should con­sid­er the fac­tors you nor­mal­ly would when decid­ing on which health insur­ance cov­er­age is right for you and your fam­i­ly. For exam­ple, in addi­tion to pre­mi­um cost, you may want to com­pare cost-shar­ing require­ments such as plan deductibles and copays. You may also want to con­sid­er how much progress you have made toward your deductible and oth­er plan accu­mu­la­tors, and com­pare dif­fer­ent plans’ and cov­er­age options’ provider net­works and pre­scrip­tion drug for­mu­la­ries based on your family’s med­ical care needs. Note, how­ev­er, that if you are cur­rent­ly employed by the employ­er offer­ing the COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance, you may enroll in Mar­ket­place cov­er­age but are inel­i­gi­ble for a sub­sidy or a pre­mi­um tax cred­it for the Mar­ket­place cov­er­age for the peri­od you are offered the COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assistance.

Q21: Can I qual­i­fy for a spe­cial enroll­ment peri­od (SEP) to enroll in indi­vid­ual mar­ket health insur­ance cov­er­age, such as through a Health Insur­ance Mar­ket­place®, when my COBRA pre­mi­um assis­tance ends on Sep­tem­ber 30? What about if my COBRA con­tin­u­a­tion cov­er­age ends soon­er than that?

When your COBRA pre­mi­um assis­tance ends, you may be eli­gi­ble for a SEP to enroll in cov­er­age through a Health Insur­ance Mar­ket­place®, or to enroll in indi­vid­ual health insur­ance 10 cov­er­age out­side of the Mar­ket­place. You may also qual­i­fy for a SEP when you reach the end of your max­i­mum COBRA cov­er­age peri­od. For more infor­ma­tion about this SEP, see: https://www.healthcare.gov/unemployed/cobra-coverage/.

For more infor­ma­tion about enrolling in Mar­ket­place cov­er­age, see: HealthCare.gov, or you can call 1–800-318‑2596 (TTY: 1–855-889‑4325). If your state has its own Mar­ket­place plat­form, find con­tact infor­ma­tion for your State Mar­ket­place here: https://www.healthcare.gov/marketplace-in-your-state/.

You may apply for and, if eli­gi­ble, enroll in Med­ic­aid cov­er­age at any time. For more infor­ma­tion, go to: https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/.

More Infor­ma­tion

Q21: How can I get more infor­ma­tion on my eli­gi­bil­i­ty for COBRA con­tin­u­a­tion cov­er­age or the pre­mi­um assis­tance, includ­ing help if my employ­er has denied my request for the pre­mi­um assistance? 

For group health plans spon­sored by pri­vate-sec­tor employ­ers, guid­ance and oth­er infor­ma­tion is avail­able on the DOL web site at https://www.dol.gov/cobra-subsidy. You can also con­tact one of EBSA’s Ben­e­fits Advi­sors at askebsa.dol.gov or 1.866.444.3272. EBSA’s Ben­e­fits Advi­sors may also be able to assist if you feel that your plan or employ­er has improp­er­ly denied your request for treat­ment as an Assis­tance Eli­gi­ble Indi­vid­ual. Employ­ers and plans may be sub­ject to an excise tax under the Inter­nal Rev­enue Code for fail­ing to sat­is­fy the COBRA con­tin­u­a­tion cov­er­age requirements.This tax could be as much as $100 per qual­i­fied ben­e­fi­cia­ry, but not more than $200 per fam­i­ly, for each day that the plan or employ­er is in vio­la­tion of the COBRA rules. If you feel you may have been improp­er­ly denied pre­mi­um assis­tance, con­tact EBSA at askebsa.dol.gov or 1.866.444.3272. If you work for a state or local gov­ern­ment employ­er and have ques­tions regard­ing the pre­mi­um assis­tance, please con­tact the Cen­ters for Medicare & Med­ic­aid Ser­vices via email at [email protected] or call 410–786-1565.

Orig­i­nal­ly post­ed on dol.gov

__________________________

[1]  For more infor­ma­tion on COBRA con­tin­u­a­tion cov­er­age require­ments applic­a­ble to pri­vate-sec­tor employ­ment based group health plans, see “An Employer’s Guide to Group Health Con­tin­u­a­tion Cov­er­age Under COBRA,” avail­able at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/anemployers-guide-to-group-health-continuation-coverage-under-cobra.pdf.

[2]  Health Insur­ance Mar­ket­place® is a reg­is­tered ser­vice mark of the U.S. Depart­ment of Health & Human Services

[3]  85 FR 26351 (May 4, 2020).

[4]  Avail­able at https://www.dol.gov/sites/dolgov/files/ebsa/employers-and-advisers/plan-administration-andcompliance/disaster-relief/ebsa-disaster-relief-notice-2021–01.pdf.

[5]  ARP sec­tion 9501(a)(1)(A).

[6]  Notice of Exten­sion of Cer­tain Time­frames for Employ­ee Ben­e­fit Plans, Par­tic­i­pants, and Ben­e­fi­cia­ries Affect­ed by the COVID–19 Out­break (Joint Notice). 85 FR 26351 (May 4, 2020); EBSA Dis­as­ter Relief Notice 2021-01 (Feb. 26, 2021), avail­able at https://www.dol.gov/sites/dolgov/files/ebsa/employers-and-advisers/planadministration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021–01.pdf. Note that the Depart­ments of Labor and the Trea­sury share juris­dic­tion for enforce­ment of the COBRA con­tin­u­a­tion provisions.

[7]  Note, how­ev­er, that a poten­tial Assis­tance Eli­gi­ble Indi­vid­ual has the choice of elect­ing COBRA con­tin­u­a­tion cov­er­age begin­ning April 1, 2021 or after (or begin­ning prospec­tive­ly from the date of your qual­i­fy­ing event if your qual­i­fy­ing event is after April 1, 2021), or elect­ing COBRA con­tin­u­a­tion cov­er­age com­menc­ing from an ear­li­er qual­i­fy­ing event if the indi­vid­ual is eli­gi­ble to make that elec­tion, includ­ing under the extend­ed time frames pro­vid­ed under the Joint Notice and EBSA Notice 2021-01. The elec­tion peri­od for COBRA con­tin­u­a­tion cov­er­age with pre­mi­um assis­tance does not cut off the individual’s pre­ex­ist­ing right to elect COBRA con­tin­u­a­tion cov­er­age, includ­ing under the extend­ed time frames pro­vid­ed under the Joint Notice and EBSA Notice 2021-01. Note, that the pre­mi­um assis­tance is only avail­able for peri­ods from April 1, 2021 through Sep­tem­ber 30,2021