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March 19, 2021

American Rescue Plan Act of 2021 Includes 6-Months of Free COBRA Coverage

The American Rescue Plan Act of 2021 provides that the federal government will pay 100 percent of COBRA insurance premiums for employees who lost their jobs because of the COVID-19 pandemic (and for their covered relatives), for a six month period from April through September 2021, allowing them to stay on company-sponsored health plans. Employees who did not previously elect COBRA or who let it lapse will be offered a 60-day window to make the election. The maximum COBRA period of 18 months is not extended, but even those employees who lost health insurance in April 2020, at the start of the pandemic, may be entitled to the six month subsidy, since their 18-month COBRA period runs through September 2021. Employees eligible for other group health plans or Medicare are not eligible for the subsidy.