Updated 04-30-2021

The American Rescue Plan (ARP) Act of 2021
COBRA and State Continuation
Requirements for Employers

* The included information is our best understanding of the rules and regulations as they apply to Texas Employers. Regulations are established and governed by the Department of Labor. It is ultimately the employer's responsibility to comply with all State and Federal regulations. Please check back with this page periodically for updates.

The American Rescue Plan (ARP) Act of 2021 was signed into law on March 11th and establishes new rules surrounding COBRA and State Continuation. The DOL has placed the burden of educating former and current employees on the details of the ARP Act. Enrollment timetables, required notices and premium payments for former employees coverage will undergo temporary changes.

Employers must send new notifications to formerly covered employees who were newly eligible for continuation as far back as November 1st, 2019 due to being terminated involuntarily or having an involuntary reduction in hours. Former covered employees and covered dependents will be eligible to start an extended election period as early as April 1st 2021 with 100% Premium Assistance. This includes former employees and covered dependents who have elected, waived or previously dropped continuation of coverage. This excludes those who have exhausted their continuation period or are eligible for Medicaid, Medicare or other group coverage (including spousal coverage). The employer will be responsible for the cost of the continuation premium, but will get a tax credit on their Medicare Taxes for the premium amounts (including the additional 2% allowable Continuation Administration fee).

Current employees involuntarily losing their coverage between April 1st and September 30th 2021 must be provided notification of eligibility for the Premium Assistance.

The ARP Act provides 100% Premium Assistance for Assistance Eligible Individuals (AEIs) from April 1st through September 30th, 2021.