COBRA Grace Period Extensions Under EBSA Disaster Relief Notice 2021-01
Under EBSA Disaster Relief Notice 2021-01, you may qualify for additional time to pay your COBRA premiums. If you need more time to pay your COBRA premiums, please notify our Customer Service team at 800-556-313.
In April 2020, the U.S. Department of Labor and the U.S. Department of Treasury enacted a temporary new rule allowing, among other things, more time to pay your COBRA premiums. This rule sought to assist qualified beneficiaries having trouble paying premiums timely because of COVID-19 and applied only during the COVID Outbreak Period which begin on March 1st 2020 and is still in effect.
On February 26, 2021, the Department of Labor issued EBSA Disaster Relief Notice 2021-01, clarifying that the plan or participant-related deadlines subject to such Outbreak Period relief would be disregarded until the earlier of one-year from the date they were first eligible for relief, or 60-days after the end of the National Emergency declaration. On that applicable date, the timeframes for the previously disregarded deadlines would resume.
As a reminder:
- The rule only temporarily extended your premium due date.
- Monthly premiums are not forgiven.
- All coverages will be retroactively terminated if premiums are not paid in full.
- Coverage will end the last day of the month for which full premium was received
- If you received services, you may be responsible for any claims incurred once coverage ends.
American Rescue Plan Act (ARPA) COBRA Subsidy
On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed by President Biden. ARPA is a $1.9 trillion economic stimulus package proposed by Biden to speed up the United States' recovery from the economic and health effects of the COVID-19 pandemic.
ARPA includes a provision for a COBRA continuation coverage premium subsidy of 100 percent for individuals and families who experienced an involuntary termination of employment or reduction in hours.
This subsidy will be available for Assistance Eligible Individuals (AEIs), as determined by the Act, from April 1, 2021 through September 30, 2021. COBRA participants must meet the below criteria in order to be an AEI:
- Coverage was lost due to involuntary termination of employment or reduction in hours.
- The COBRA participant is still within the COBRA eligibility period as of April 1, 2021.
- Eligible COBRA participants who do not have an election in place will have the opportunity to make an election during an Extended Election Period and will be able to take advantage of the subsidy effective April 1, 2021. This will be referred to as the "lookback period" in determining member eligibility.
- Eligible COBRA participants who have an election in place as of April 1, 2021 will be able to take advantage of the subsidy effective April 1, 2021.
- Eligible COBRA participants who become eligible for COBRA continuation coverage on or after April 1, 2021 will be eligible for the subsidy while it is in effect.
Employers will be responsible for reporting who is eligible for the subsidy to BenefitHelp Solutions. BenefitHelp Solutions will notify individuals who qualify for the subsidy no later than May 31st, 2021 as required under the ARPA.
If you are currently enrolled in COBRA and believe you qualify for the subsidy, you should continue to make your premium payment. If you are reported to BenefitHelp Solutions as being eligible for the subsidy any premium overpayment you have made will be refunded within 60-days.