American Rescue Plan Act Impacts to COBRA Health Insurance

Details
Sat, Apr 17, 2021
6:29 pm - 7:29 pm
2021-04-17T18:29:00-04:00
2021-04-17T19:29:00-04:00
This event has already occurred.
Online w/ Henderson County Chamber of Commerce
204 Kanuga Rd, Hendersonville, NC 28792, USA
Free
Contact
Henderson County Chamber of Commerce
Information
Constangy, Brooks, Smith & Prophete has shared guidance on the impacts to COBRA resulting from the American Rescue Plan Act through their Legal Bulletin #876.
According to the bulletin: if an individual became or becomes eligible for COBRA because of an involuntary change in status, and if the individual has any eligibility left between April 1 and September 30, 2021, and if the individual doesn’t have other coverage available through a spouse’s employment or the individual’s new employment, then he or she will get “free” COBRA coverage. The employer then can recoup the costs with a credit on payroll taxes. The plan sponsor will have to do a great deal of administrative work figuring out how to send which notice to which individuals.
Employer-sponsored health plans will be required to provide six months of “free” COBRA coverage to most plan participants who
  • Are eligible for COBRA continuation coverage, and
  • Lose coverage because of involuntary employment termination or reduction in hours.
The Plan must inform the eligible individual about the new benefit and provide the option to sign up for what amounts to a premium waiver for the six-month period. An employee or former employee will be eligible for this “free” coverage benefit if any of the following apply during the April 1-September 30 time period:
  • The individual becomes eligible for COBRA coverage
  • The individual currently has COBRA coverage,
  • The individual would have been eligible for COBRA coverage but declined it
  • And the individual is not eligible for other coverage, including through new employment or a spouse’s plan.