Important Information on Current COBRA Special Enrollment Period

The American Rescue Plan Act (ARPA), the COVID-19 pandemic economic relief bill signed in March, contained several measures addressing health insurance. A key one you should be aware of deals with subsidized COBRA benefits for those who lost group coverage!


The subsidy covers 100 percent of the COBRA health insurance premium for eligible individuals from April 1 to Sept. 30, 2021. This tight timeframe presents challenges for employers, health plans and eligible individuals to communicate and enroll quickly!


Individuals who experienced a qualifying loss of coverage and have not yet exhausted available COBRA continuation coverage, based on the original event date, may be eligible to re-enroll in group- coverage with this subsidy – even if they previously declined COBRA coverage. That includes people involuntarily terminated, who had a reduction in job hours or lost dependent coverage as far back as October 2019 (18 months prior to April 2021). It may be as far back as March 1, 2018, for Cal-COBRA. (The government is still determining whether the offer should go back 36 months or not.)


A COBRA special election period began on April 1, 2021 and ends 60 days after notice of the election period is provided. Plan administrators for groups subject to federal COBRA must provide this notice within 60 days of April 1, 2021, to anyone who could have been on COBRA now, even if they it. They should be given a special "second chance" election right to take advantage of the offer.


Plan sponsors subject to federal COBRA must fund the premium subsidy but will be able to recover 100% of the cost, including the applicable 2% COBRA administrative fee, through a quarterly payroll tax credit.


For smaller groups, subject to Cal-COBRA, the insurance carriers will send notices to all potentially eligible individuals on how to enroll. They will fund the coverage.


Note: A person is not eligible for the subsidy if he or she is eligible for another group health plan (through a spouse, new employer, etc.) or for Medicare. People on individual coverage (private or through Covered California) can elect to move on COBRA via the subsidy and move back on the exchange after the subsidy period.