What Is the COBRA Health Insurance Subsidy Provided by ARRA?
The 65% COBRA subsidy was for 15 months and provided by the American Recovery and Reinvestment Act (ARRA). The ARRA premium subsidy was for COBRA continuation health benefits, if you were eligible. Employee and dependents would be eligible for COBRA by losing your health insurance via involuntary termination between September 1, 2008 and June 1, 2010. You must have elected COBRA coverage.
“Assistance eligible individuals” are eligible for the premium reduction described above. An “assistance eligible individual” is the employee or a member of his family who: 1) is eligible for COBRA continuation health coverage at any time between September 1, 2008 and December 31, 2009; 2) elects COBRA coverage; and 3) is eligible for COBRA as a result of the employee’s involuntary termination between September 1, 2008 and December 31, 2009. Individuals who are eligible for other group health insurance coverage (such as a spouse’s health insurance plan) or Medicare are not eligible for the premium reduction. The COBRA health subsidy is only available for health insurance premiums paid for periods of coverage after February 17, 2009. An eligible individual who pays the 35 percent COBRA health insurance premium is deemed to have paid the full COBRA premium. The remaining insurance premium is taken as a credit by the employer or health insurance plan against employment taxes. Credits that
