DOL releases guidance on COBRA premium assistance

The U.S. Department of Labor has released answers to frequently asked questions about a federal stimulus law that pays COBRA premiums so that workers who are laid off or had their hours reduced can continue their health care coverage.

The $1.9 trillion American Rescue Plan stimulus package signed into law in March included a provision that covers 100 percent of the cost of COBRA premiums from April 1 through Sept. 30, 2021 for eligible workers. An employer or plan to whom a COBRA premium is paid will receive a tax credit for the amount of the premium assistance provided during that six-month period.

The FAQs answer questions about who is eligible to receive the premium assistance, how to apply to receive it, when to apply for the assistance, and other details about the provision.

To see the full list of answers to the FAQs, click on this link. The DOL also provides a general explainer for workers about what COBRA coverage is and how it works with this document.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) has long allowed workers who lose their jobs to continue being covered on their former employer’s health care plan. COBRA coverage can be expensive with former employees having to pay not only their original premiums but also their previous employer’s share of the premiums as well as an administrative fee. But the new stimulus provision enacted in March temporarily covers the entire cost of the COBRA coverage through Sept. 30.