chamber of the house of representatives

On Wednesday, the House of Representatives passed the President’s $1.9 trillion American Rescue Plan Act (ARPA). The Covid relief package includes provisions that will reduce the cost of health insurance during the ongoing pandemic. Biden is expected to sign off on the bill on Friday.

The stimulus package includes $1400 stimulus checks for most Americans, increased child tax credits for some families and a 100% subsidy of COBRA insurance premiums for workers who were laid off and want to continue on their employer-sponsored health insurance. The House version of the bill called for an 85% federal COBRA subsidy.

Eligibility For Federal COBRA Subsidy

The COBRA Act requires employers with 20 or more workers to offer a continuation of their group health plan if their insurance would end regardless of how their job had ended. With the American Rescue Plan, a terminated worker who is eligible to receive continuation benefits and has not elected or discontinued COBRA coverage by April 1, may elect to continue coverage. The federal assistance is not available for workers who voluntarily quit their jobs.

Another highlight of the landmark legislation is that laid-off workers may be given up to 90 days, following the employer COBRA notice, to enroll in a different health plan if the employer has plan choices. The premium for other plans cannot be more expensive than the premiums they pay for their existing plans.

Federal Pandemic COBRA Subsidy Runs Through September 2021

A special enrollment period starting April 1 and ending 60 days after the employer sent the COBRA notification will allow workers to take part in the federal subsidy. This benefit through September 30, 2021 and lasting 6 months at the most. A caveat of the law is the subsidy would end early if the individual’s 18 month COBRA coverage period ends earlier than September 2021.

Similar to the existing federal COBRA ACT, under the ARPA, if an individual qualifies for Medicare or becomes eligible for a new group health plan their continuation insurance would end.

Federal COBRA Applies To Businesses With 20 Or More Employees

American workers of small businesses are left holding the shortest straw. Like COBRA, the provisions in the in the latest stimulus package do not cover businesses with 19 or fewer employees.

Affordable Insurance

If you are fairly healthy and still want to remain insured, more affordable insurance alternatives to COBRA may be available based on where you live. Term health insurance is a popular option and available in most States. This can protect you from high medical costs of new injuries or new illnesses that unexpectedly occur while allowing you to use any licensed doctor. Coverage is available up to $1 million per person.

More information and pricing: Call us at 1-877-262-7241 or complete a free quote online.

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