QUESTION: Is the COBRA premium subsidy still available for a period of coverage from April 1, 2021, through September 30, 2021, if the COBRA election is made after September 30, 2021?
ANSWER: So long as a COBRA qualified beneficiary who is an Assistance Eligible Individual (AEI) under the American Rescue Plan Act of 2021 (ARPA) elects COBRA coverage for the period from April 1 through September 30, 2021, within COBRA’s 60-day election period, the subsidy is available. The 60-day election period begins after the potential AEI is provided with an ARPA general notice (for a qualifying event after April 1, 2021) or an ARPA notice in connection with extended election periods (with respect to a qualifying event before April 1, 2021). For example, a potential AEI who was involuntarily terminated on August 27, 2021, and was provided with the ARPA general notice on September 1, 2021, would be entitled to elect COBRA until October 31, 2021. Even if an AEI does not make a COBRA election until the end of October, the subsidy will still be applied toward coverage periods beginning on or after April 1, 2021, and before October 1. Note also that, depending on the plan’s COBRA billing cycle, a period of coverage for which the subsidy applies may extend beyond September 30 (see our Checkpoint Question of the Week).
As another example, a potential AEI who was involuntarily terminated on December 1, 2020, but did not elect COBRA, and then inadvertently was not provided an ARPA notice in connection with extended election periods until September 1, 2021, would be entitled to elect COBRA until October 31, 2021. Again, the subsidy would be available only for periods of COBRA coverage beginning on or after April 1 and before October 1. (As a reminder, individuals eligible for an extended election period were required to be notified of this opportunity by May 31, 2021, and model DOL notices are available (see our Checkpoint article).) For more information, see EBIA’s COBRA manual at Section VI.H (“ARPA Premium Subsidy”) and the manual’s Sample Notices for COBRA Premium Subsidy.
Contributing Editors: EBIA Staff.