COVID Provoked COBRA Changes

The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) gives workers who lose their health benefits and their families the right to choose to continue group health benefits for limited periods of time under certain circumstances such as job loss, reduction in the hours worked, transition between jobs, death and divorce. Qualified individuals may be required to pay the entire health insurance premium for coverage up to 102% of the cost to the plan.

The American Rescue Plan Act of 2021 (“ARPA“) provided, among other provisions:

  • an estimated $1.9 trillion in stimulus aid for the COVID-19 pandemic
  • additional recovery rebate checks
  • changes to certain child-based tax credits
  • making certain unemployment benefits free of federal income tax
  • extending certain tax credits for employee retention and employer provided sick leave
  • providing additional funding for the Paycheck Protection Program
  • providing grants to places that serve food and drink

ARPA also made a number of changes to COBRA, including:

  • a federal government reimbursement of up to six months of health insurance premiums
  • an extension of the period in which a worker can elect to enroll in a COBRA health plan