Your COBRA ARPA Subsidy is About to Expire. Now What?

The American Rescue Plan Act (ARPA) of 2021 included a 100 percent COBRA subsidy for workers who were involuntarily terminated or experienced a reduction in hours to continue their employer health insurance coverage under COBRA. The subsidy is effective April 1, 2021 through September 30, 2021. If you are receiving the subsidy, you might be wondering what your potential next steps are. We’ve outlined a few things you can do below. 

Remain on COBRA

When the subsidy expires on September 30, 2021, COBRA members may need to pay their entire premium for COBRA coverage, plus a 2 percent administration charge. Your employer or its COBRA administrator may provide you with a premium notice so you know how much you need to pay in premiums each month in order to maintain COBRA coverage. 

It’s important to note that you can only maintain COBRA coverage if you’re still eligible. The U.S. Department of Labor has information on how long an individual is eligible to be on COBRA. 

Shop for alternative coverage

You may also seek alternative healthcare coverage that better aligns with your needs. Those options may include: 

• Coverage through healthcare.gov. The federal government’s health insurance exchange will show you what coverage is available or if the state you live in has its own health insurance exchange for you to shop for coverage.
• An alternative marketplace. You can also shop for alternative coverage through a private marketplace. For example, our individual marketplace gives you access to find coverage that’s potentially more affordable. 
• Medicare or Medicaid coverage, if you’re eligible. You may be eligible to enroll in Medicare or Medicaid. 

There are other options that could be available, some of which may be specific to your situation. As a result, the above list is not an exhaustive list of options. 

Please note: It’s important to remember if you leave COBRA and sign up for marketplace coverage, you can’t switch back to COBRA unless you’ve experienced another COBRA-qualifying event.  

Gain coverage elsewhere

You can also let your COBRA coverage expire, possibly because you are eligible for coverage through a new employer or your spouse. If you are planning to become covered by your spouse’s health insurance, you’ll want to check the insurance policy for coverage periods and other enrollment information. 

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The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.