Explaining how the COBRA subsidy in the American Rescue Plan will work

April 1, 2021

By: Daniel J. Nugent

As a bonus to Bond’s March 30 webinar about the evolving legal implications of COVID-19 for business, attorney Daniel J. Nugent, a member of the firm’s employee benefits and executive compensation practice, explained some of the mechanics of the COBRA subsidy provided for in the American Rescue Plan Act (ARPA).

Short for Consolidated Omnibus Budget Reconciliation Act, COBRA is the law that enables employees to continue their health insurance coverage after their employment ends. Between April 1 and September 30, 2021, the government will subsidize 100% of the monthly COBRA cost for employees who lost their jobs through involuntary termination or a reduction in hours. In his video, DJ explains that ARPA establishes employer health plans and insurers as the intermediaries between the employees and the federal government. Employer health plans and insurers advance the subsidy to qualifying individuals, and then the government reimburses them in the form of a tax credit against their quarterly Medicare hospital insurance tax. 

The full presentation covered the following topics: 

  • ARPA COBRA Subsidy - Tax Credit Provisions
  • ARPA Family Leave and Sick Leave Tax Credit Provisions
  • Vaccination Update
  • Update from Albany
  • Marijuana Legislation
  • Unemployment Update

Click here to view the webinar in its entirety or to register for upcoming Tuesday presentations.