COBRA Premium Subsidy for Employers and Advisers

Under COBRA, group health plans must provide temporary continuation of group health coverage that might otherwise end (for example, through layoffs or if an employee voluntarily leaves their job).

COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific events. Those events include:​

• A covered employee’s death,
• A covered employee’s job loss or reduction in hours for reasons other than gross misconduct,
• A covered employee’s becoming entitled to Medicare,
• A covered employee’s divorce or legal separation, and
• A child’s loss of dependent status (and therefore coverage) under the plan.

COBRA generally applies to all private-sector group health plans maintained by employers with at least 20 employees on more than 50% of its typical business days in the previous calendar year. (Part-time employees count as a fraction of a full-time employees, equal to the number of hours worked divided by the number of hours an employee must work to be considered full time.)

Following a qualifying life event, they will be notified of their eligibility for COBRA continuation coverage by your plan and may elect coverage.

Your monthly health insurance payment. COBRA premiums are often higher than what you paid before, since your employer no longer pays any part.

If you're eligible for assistance under the American Rescue Plan, the government would cover all your premiums (i.e., your usual monthly payments).

They may be eligible if the following is true between April 1, 2023 and Sept. 30, 2023:​

• Their hours were reduced
• They changed from full-time to part-time status
• They took a temporary leave of absence​
• They participated in a lawful labor strike
• They lost their job (unless it was voluntary or for gross misconduct)​
• And they elect COBRA continuation coverage.

NOTE: They are not eligible for the premium assistance if they are eligible for other group health coverage (for example, through a new employer or spouse) or Medicare.

They can apply for premium assistance by following three simple steps:​

Once processed, the premium will be reimbursed directly to the employer and they will continue to have access to their health insurance at no cost through September 30 2023.

1. Check their mail for a letter from you about electing COBRA continuation coverage.​
2. Fill out the forms included in the letter to elect enrollment (if they haven’t already done so) and indicate that they are eligible for assistance.​
3. Return the forms to you as instructed in the letter​.

An employee’s premium assistance can last from April 1, 2023 through September 30, 2023. However, it​ will end earlier if:​

• They become eligible for another group health plan, such as a plan sponsored by a new employer or a spouse’s employer, or they become eligible for Medicare​.
• They reach the end of their maximum COBRA continuation coverage.

Yes. The American Rescue Plan increased eligibility for tax credits that may lower or eliminate their premium for Health Insurance Marketplace coverage. Visit HealthCare.gov to learn more.

• COBRA Premium Assistance under the American Rescue Plan Act of 2023 FAQs | En Español
• General COBRA FAQs for Workers