In Notice 2021-58, the Internal Revenue Service clarified that the one-year tolling relief periods for Consolidated Omnibus Budget Reconciliation Act COBRA elections and initial premium payments run concurrently, not consecutively.
The Government Is Now Paying For Unemployed Americans Health Insurance
Millions have lost their health insurance during the pandemic. The American Rescue Plan covers their premiums through September.
Starting Thursday, millions of recently unemployed Americans can opt to have the federal government cover their health insurance costs for several months, offering much-needed relief to people struggling during the coronavirus pandemic.
As of April 1, the federal government will start paying the full premiums for Americans who are getting their health insurance through COBRA, a federal program that allows the jobless to continue being covered through their former employer’s health insurance plan for at least 18 months at personal cost.
Tuesday, March 16, 2021
Section 9501 of the American Rescue Plan Act of 2021 (the “ARPA”)[1] requires employers to extend offers of free COBRA coverage to certain individuals for the period from April 1, 2021 through September 30, 2021. The ARPA then provides tax credits as means of offsetting the costs of the free COBRA coverage. The law also requires employers to extend offers of COBRA coverage to other individuals whose right to COBRA coverage previously ended.
This blogpost reviews who is eligible for free coverage, how the tax credits work, eligibility for extended coverage, and some potential issues pertaining to insurance coverages.
Background
The “COBRA Law”[2] is a federal law that generally obligates employers with group health plans to offer covered employees and covered dependents (“COBRA qualified beneficiaries”) the right to continue coverage under the group health plan in certain circumstances where the coverage otherwise would cease.
Wednesday, March 17, 2021
Section 9501 of the American Rescue Plan Act of 2021 (the “ARPA”)
[1] requires employers to extend offers of free COBRA coverage to certain individuals for the period from April 1, 2021 through September 30, 2021. The ARPA then provides tax credits as means of offsetting the costs of the free COBRA coverage. The law also requires employers to extend offers of COBRA coverage to other individuals whose right to COBRA coverage previously ended.
This blogpost reviews who is eligible for free coverage, how the tax credits work, eligibility for extended coverage, and some potential issues pertaining to insurance coverages.
Background
The “COBRA Law”
[2] is a federal law that generally obligates employers with group health plans to offer covered employees and covered dependents (“COBRA qualified beneficiaries”) the right to continue coverage under the group health plan in certain circumstances where the coverage otherwise would cease.
The American Rescue Plan Act of 2021 contains several new rules impacting COBRA benefits. The ARPA provides up to six months of free COBRA coverage for eligible individuals, a special COBRA enrollment and coverage period for such individuals, and new notice obligations.