COBRA Subsidy through American Rescue Plan Act 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (Act). The Act is a $1.9 trillion legislative package that includes pandemic relief for individuals and families.


One of the provisions allows for COBRA Participants to get a 100% Subsidy on their premiums. Any one eligible for COBRA due to an involuntary loss of employment may be eligible for the subsidy, even if they did not elect COBRA. If they are still in their Look-Back period they can still enroll and receive the subsidy.


The COBRA Subsidy is effective April 1, 2021 through September 30, 2021:



Small Employers with less than 20 who are subject to Utah Mini-Cobra have a 12-month length of coverage. Involuntary loss of employment starting 5/1/2020 and forward would still be eligible for the subsidy as they are still in their 12-month period. COBRA coverage and the subsidy would end at their normal 12-month deadline.

  • It appears the subsidy will be administered by the carrier. Medical Carrier will pay the premium and then be reimbursed by the government.

Large Employers with more than 20 who are subject the Federal COBRA have an 18-month length of coverage. Coverage can go longer in some situations. To be safe, employees that lost coverage due to involuntary loss of employment after 11/1/2019 may be eligible for the subsidy.

  • The Employer will be required to pay the COBRA premium but then will be reimbursed through a refundable payroll quarterly tax credit, like the Emergency Paid Sick Leave Act for COVID-19 that ended March 31, 2021.



As an employer subject to COBRA or Mini-COBRA, you may want to check your records for all employees terminated after the dates listed above. Anyone that terminated in-voluntary will need to get a notice within 60 days of April 1, 2021.



Click Here for the DOL FAQ’s (Includes links to sample notices)

Click Here for the UBA Document



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