- What is the American Rescue Plan Act of 2021?
- What are the Key dates with regard to the COBRA Subsidy?
- Who is eligible for the subsidy?
- How will I know if I’m eligible for the subsidy?
- UPDATE: If I am an Assistance Eligible Individual and elected or want to elect dental or vision COBRA continuation coverage with the ARP premium assistance, do I remain eligible for the ARP premium assistance if I am or become eligible to enroll in other group health plan coverage or Medicare and that coverage does not provide dental or vision benefits?
- I’m enrolled in multiple plans. Will the subsidy apply to all of them?
- Does this subsidy extend the duration of COBRA?
- If I’m eligible for the subsidy and I’m currently enrolled and up to date on my payments, will the subsidy be automatically applied?
- Should I continue making my regular payments until the subsidy is applied?
- If I make my regular payments and the subsidy is later applied to a month I’ve already paid for, can I get a refund?
- If I’m eligible for the subsidy, when can I expect for it to be applied?
- What is the additional election period?
- How do I take advantage of the additional election opportunity?
- UPDATE: If I don’t elect COBRA coverage with the ARP premium assistance during the additional election period, can I change my mind later?
- I did not elect COBRA when it was offered to me or elected and then stopped payments. If I elect COBRA coverage during the additional election period, will I need to pay premiums for months prior to April 1, 2021?
- Where can I get more information on the ARP?
What is the American Rescue Plan Act of 2021?
The American Rescue Plan Act of 2021 (ARP) includes a 100% COBRA premium subsidy for individuals who have been involuntarily terminated from employment or experienced a reduction in hours. The subsidy is available for periods of COBRA coverage on or after April 1, 2021 and through September 30, 2021. The ARP also provides an additional election opportunity for subsidy-eligible individuals who didn’t previously elect COBRA coverage, or elected and dropped COBRA coverage, to enroll effective April 1, 2021, provided the individuals are still within their COBRA coverage period.
What are the Key dates with regard to the COBRA Subsidy?
ARPA includes a provision for a COBRA continuation coverage premium subsidy of 100 percent for individuals and families who experienced an involuntary termination of employment or reduction in hours.
Key dates with regard to the COBRA Subsidy:
- March 11, 2021 – Bill signed by President Biden
- April 1, 2021 – Subsidy effective date
- By May 31, 2021 – Subsidy-eligible individuals who become eligible for COBRA prior to April 1, 2021 notified of subsidy
- We expect to begin notifying subsidy-eligible individuals in May 2021
- Individuals with an additional election opportunity will have 60 days to elect coverage
- Individuals who become eligible for COBRA on/after April 1, 2021 will be notified of subsidy
- September 30, 2021 – general subsidy end date (subsidy will end earlier for individuals whose COBRA coverage period ends before September 30, 2021)
Who is eligible for the subsidy?
Individuals who meet all of the following criteria:
- Lost coverage due to involuntary termination of employment or reduction in hours;
- Are still within their COBRA coverage period as of April 1, 2021; and
- Have not become eligible for coverage under another group health plan (such as a new employer’s plan, a spouse’s plan, or Medicare).
Subsidy-eligible individuals who do not have an election in place as of April 1, 2021 will have an opportunity to elect during an additional election period and will be able to take advantage of the subsidy effective April 1, 2021.
Subsidy-eligible COBRA participants who have an election in place as of April 1, 2021 will be able to take advantage of the subsidy effective April 1, 2021.
Subsidy-eligible COBRA participants who become eligible for COBRA continuation coverage on or after April 1, 2021 will be eligible for the subsidy while it is in effect.
How will I know if I’m eligible for the subsidy?
Under the Act both employers and individuals provide information confirming their eligibility for the subsidy. Employers report to their COBRA administrators whether an individual is eligible for COBRA and experienced an event that qualifies him or her for the subsidy, and the individual reports whether he or she wants the subsidy and confirms that he or she is not eligible for other coverage that would disqualify him or her from receiving a subsidy. We are working very closely with employers and individuals to identify who is eligible for the subsidy. We will provide information on the subsidy to you, in writing, within the deadlines set by the ARP. We expect to begin this notification process in May 2021.
UPDATE: If I am an Assistance Eligible Individual and elected or want to elect dental or vision COBRA continuation coverage with the ARP premium assistance, do I remain eligible for the ARP premium assistance if I am or become eligible to enroll in other group health plan coverage or Medicare and that coverage does not provide dental or vision benefits?
No. According to the IRS guidance, eligibility for COBRA premium assistance for all benefits ends when the Assistance Eligible Individual becomes eligible for coverage under another group health plan or Medicare, even if the other coverage does not include all of the benefits provided by the COBRA continuation coverage. For example, eligibility for Medicare, which generally does not provide vision or dental coverage, disqualifies an individual from premium assistance under the ARP for previously elected dental-only or vision-only COBRA continuation coverage.
I’m enrolled in multiple plans. Will the subsidy apply to all of them?
At this time the subsidy appears to apply to medical/RX, dental, and vision plans, and some health reimbursement arrangements (HRAs). Flexible spending accounts (FSAs) are excluded.
Does this subsidy extend the duration of COBRA?
No. The ARP did not extend the length of COBRA continuation coverage.
If I’m eligible for the subsidy and I’m currently enrolled and up to date on my payments, will the subsidy be automatically applied?
Yes. If you are eligible for the subsidy and are up to date on your premium payments, we will automatically apply the subsidy from April 1, 2021 to September 30, 2021 or until your COBRA continuation period ends, whichever is earlier.
Should I continue making my regular payments until the subsidy is applied?
If you’d like to ensure your coverage remains active, you may wish to make your upcoming premium payments. If you are eligible for the subsidy, any payment you make for coverage during the subsidy period can be applied to a future month’s premium payment or refunded to you upon request. If you do not make payments, your coverage may be temporarily suspended. If your eligibility for the subsidy is confirmed, your coverage will be reinstated effective April 1, 2021 when the subsidy is applied to your account. If your coverage was suspended and you incurred claims during this time, you can resubmit the claims to your insurance carrier once your coverage is reinstated.
If I make my regular payments and the subsidy is later applied to a month I’ve already paid for, can I get a refund?
Yes.
If I’m eligible for the subsidy, when can I expect for it to be applied?
We are working very closely with employers and individuals to identify who is eligible for the subsidy. We will provide information on the subsidy to you, in writing, within the deadlines set by the ARP. We expect to begin this notification process in May 2021. Once you are notified and return the paperwork confirming your eligibility, your subsidy will be applied.
What is the additional election period?
The ARP provides an additional election opportunity for subsidy-eligible individuals who previously did not elect, or elected and dropped, COBRA coverage but now wish to elect COBRA coverage.
How do I take advantage of the additional election opportunity?
We will provide information on the additional election period to subsidy-eligible individuals, in writing, within the deadlines set by the ARP. Once notified, you will have 60 days to return the paperwork with your election.
UPDATE: If I don’t elect COBRA coverage with the ARP premium assistance during the additional election period, can I change my mind later?
No. If you are an Assistance Eligible Individual electing COBRA continuation coverage beginning April 1, 2021 or after and your qualifying event occurred prior to the date your coverage with ARP premium assistance begins, at the time you elect coverage you must choose whether to begin coverage on or after April 1, 2021, or to elect coverage commencing from the date of the earlier qualifying event. If you only elect COBRA continuation coverage with ARP premium assistance beginning on or after April 1, 2021, you waive your right to elect COBRA continuation coverage for any period prior to the date your coverage with premium assistance begins.
If you wish to elect COBRA continuation coverage for the period prior to the date your coverage with premium assistance begins, you must send your original election paperwork to WEX Health within 60 days from the date of the ARP notice. You can download a copy of your original election paperwork under the Communication Activity tab of your online account at cobralogin.wexhealth.com. Mail your election paperwork and premiums to:
WEX Health, Inc. (Discovery Benefits)
P.O. Box 2079
Omaha, NE 68103-2079
Please note that ARP premium assistance will not apply to a period of COBRA continuation coverage occurring before the date you become an Assistance Eligible Individual. If you are eligible and choose to elect your COBRA continuation coverage for the period of coverage prior to the date your coverage with ARP premium assistance begins, you will have to pay full premiums due for that period of coverage, subject to extensions available due to the COVID-19 National Emergency.
I did not elect COBRA when it was offered to me or elected and then stopped payments. If I elect COBRA coverage during the additional election period, will I need to pay premiums for months prior to April 1, 2021?
No. If you are eligible for the subsidy, the additional election period allows you to elect COBRA coverage from April 1, 2021 to the end of your original last day of COBRA coverage without having to pay current on all premiums due, as long as you are still within the original COBRA continuation period.
Where can I get more information on the ARP?
More information from the U.S. Department of Labor is available here.
Still have questions?
Contact us by phone at 866-451-3399 Monday through Friday from 6am – 9pm CST or by email at cobraadmin@wexhealth.com.
@2021 WEX Health, Inc.