What is the federal subsidy?
Under the Act, for COBRA coverage periods beginning on or after the date the Act is signed into law, “assistance eligible individuals” will be required to pay 35% of the applicable COBRA premium. Employers that provide group health coverage through insurance will need to cover the remaining 65% of the premiums until reimbursement can be requested from the federal government. Employers that provide coverage through insurance or self-insurance will be able to obtain reimbursement of the 65% premium subsidy as a credit against their quarterly federal employment tax filings. The language of the Act suggests the subsidy would apply regardless of the level of coverage (single, single plus one, family, etc.). Does the subsidy apply to small health plans (generally, those with fewer than 20 employees)? In general, COBRA does not apply to small health plan where the employer sponsoring the plan has fewer than 20 employees. In some states, these plans are subject to state (or “mini-COBRA”) statu
