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Here comes the COBRA Subsidy
USI released a new Compliance Update email shortly after the American Rescue Plan Act was signed into law. There is language in the law that effects the new COBRA subsidy and employer responsibilities. USI’s marketing team sent this out but I’m sending as well as this is an important update about COBRA rules, which impacts all Participating Employers within the Trust. I will also be posting this information on the Trust Website on the HR Administrators landing page under the Important News & Announcements section so you can reference this in the future as needed.
Quick Overview: The Act includes a 100% COBRA subsidy available to certain COBRA qualified beneficiaries who lose group health plan coverage as the result of an involuntary termination or reduction in hours. Employers will be able to claim a credit against payroll taxes to reimburse the cost of the subsidy. The COBRA subsidy begins April 1, 2021 and lasts through September 30, 2021.
- The COBRA subsidy is 100%. This means any eligible individual will not pay any portion of their COBRA premium during the subsidy period (April 1, 2021 – September 30, 2021) so long as they remain subsidy eligible.
- Employers are allowed a credit against Medicare payroll taxes to be reimbursed for the subsidy.