Among the various provisions in the latest COVID-19 relief bill – the American Rescue Plan Act (ARPA) – is a 100% COBRA subsidy for COBRA qualified beneficiaries where the qualifying event was an "involuntary termination" of employment or reduction in hours. This is the first time Congress has created a COBRA subsidy since the American Recovery and Reinvestment Act (ARRA) of 2009.
The COBRA subsidy will apply to coverage periods beginning on April 1, 2021 and ending on September 30, 2021.
Given that this requirement becomes effective within days, Engage is working hard to understand how the COBRA subsidy will operate. Unfortunately, there are many unanswered questions that will require additional guidance from the IRS and Department of Labor, including notification requirements. Further guidance is expected in early April. No action is required of clients at this time.
Engage will keep you updated. If you have any questions, please reference the FAQs linked below.
