New COBRA Subsidy

Congress passed the American Rescue Plan Act of 2021 (“the Act”) on March 10, 2021 and it was signed into law on March 11, 2020. 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. This is different from the original House legislation, which included an 85% subsidy (with the COBRA beneficiary responsible for 15% of the COBRA premiums). Employers will be able to claim a credit against payroll taxes to reimburse the cost of the subsidy.

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