If you lost your job and health insurance as far back as November 1, 2019, your former employer may be required to temporarily purchase COBRA health insurance for you. This is thanks to a federal law, passed in March by Congress, called the American Rescue Plan Act (ARPA) of 2021, often referred to as the new “COVID stimulus package.” The $1.9 trillion package contains a number of benefits for American workers, including health insurance for anyone who lost it due to a layoff or reduction in hours.

Specifically, the law applies to COBRA health insurance coverage. COBRA is a federal law, passed in 1986, that requires employers to offer their group health insurance plans to terminated employees. Typically, a former employee has to pay for COBRA, however, through the COBRA Assistance program, the employer will temporarily pay for it, instead. In return for providing the insurance, the employer will receive a tax credit from the federal government.

If you didn’t sign up for COBRA when it was first offered to you (or if you discontinued it), don’t worry. You can sign up for it now. Here are some guidelines about the COBRA Assistance program to keep in mind:

• The subsidy is good for six months. Employers are required to offer free COBRA coverage to eligible individuals from April 1, 2021 through September 30, 2021.
• You can take advantage of the subsidy by applying within that timeframe.
• After September, you will pay for your own health insurance again.
• COBRA covers you and your family members, and it includes medical, prescription drug, dental, and vision plans.
• The program may apply to you if you were laid off as far back as November 1, 2019.

To help you consider whether or not you’re eligible, consider these two possible examples:

Eligibility Example 1: You have COBRA right now

• Imagine that, on April 30, you have had COBRA coverage for 16 months.
• Since COBRA is only good for 18 months, this means you have two months left – May and June.
• You may be eligible for the subsidy for those two months, and your former employer would pay for it.

Eligibility Example 2: You do not have COBRA right now

• Imagine you lost health insurance coverage on February 20, 2020, but you didn’t elect COBRA coverage.
• Count 18 months from the day you could have first received COBRA. August 20, 2021 is the last date you would have had COBRA.
• If you enroll in COBRA Assistance today, you could be eligible for coverage through August 20, 2021, and your former employer would pay for it.

As you consider your eligibility, note that a few events would make you ineligible for the subsidy. First, the subsidy will end if you become eligible for health insurance coverage under another group plan or Medicare. Secondly, generally, ARPA COBRA doesn’t apply to employers that had less than 20 employees on a typical business day in 2020 (although there are exceptions by state). Lastly, count the months since you were laid off. After a layoff, you are eligible for/can hold COBRA for up to 18 months. The new ARPA law does not change nor extend this 18-month limit (with a few exceptions, such as disability, death, and divorce). If the 18-month widow has passed, then you would not be eligible for the program.

While the past year has been difficult for many, ARPA COBRA Assistance may provide welcome relief as you strive to keep you and your family healthy. The law has many nuances that KeenanDirect is ready to help you understand. To talk to a helpful KeenanDirect specialist, discover your eligibility for the subsidy, and apply, please click here. We look forward to helping you receive the health insurance benefits that are rightly yours.