COVID-19: COBRA Subsidy Under the American Rescue Plan Act of 2021–Important Deadlines Approaching

COVID-19: COBRA Subsidy Under the American Rescue Plan Act of 2021–Important Deadlines Approaching

Client Alert

Related Solutions

Lawyers with deep and broad experience counseling clients in every industry on the design, implementation, and interpretation of executive compensation arrangements and on general compensation and benefits issues.
We provide legal insight and practical solutions for one of the most complex and highly regulated areas of business.
A deep and diverse practice focused on maximizing tax efficiencies and minimizing tax risks for clients nationally and internationally.

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA), which subsidizes fully paid post-employment healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for any “assistance eligible individual” for a six-month period from April 1, 2021, to September 30, 2021, using a 100 percent federal government subsidy for premiums paid. In addition to COBRA continuation coverage, the COBRA subsidy under ARPA applies to coverage under certain state law programs that provide comparable coverage to participants and beneficiaries, often referred to as “mini-COBRA.” The employer or plan to which COBRA premiums are payable is entitled to a tax credit for the amount of the premium assistance. As discussed in further detail below, this COBRA subsidy does not apply to any otherwise eligible employees (or other qualified beneficiaries) if the employee voluntarily terminates employment.

Read the full alert.

Authors

Notice

We appreciate your interest in WilmerHale. While we are pleased to have you contact us, please keep in mind that merely contacting WilmerHale does not create an attorney-client relationship. Such a relationship will not arise until the Firm agrees in writing to represent you in connection with a particular matter. Importantly, unless and until this has occurred, you should not provide us with any confidential information, and we have no duty to keep confidential any information that we may receive from you. Thank you for your understanding.

I Accept Cancel