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If you reduced your workforce or your employees’ hours this past year, they may be eligible for 100% coverage of their monthly health insurance premiums at no cost to you or to them.

Under the American Rescue Plan, people who elect COBRA continuation coverage because of involuntary job loss or reduction in hours can apply for premium assistance coverage. If eligible, the government will cover 100% of their COBRA premiums through Sept. 30, 2021.​

The premium will be reimbursed directly to the employer, plan administrator, or insurance company through a COBRA premium assistance credit.

Here are the steps you should follow:

Check your mail

1. Plans and issuers were required to notify eligible employees who had a qualifying event before April 1, 2021 about their right to COBRA premium assistance by May 31. If you haven’t done so yet, notify them immediately.

Fill out the forms included in the letter

2. Plans and issuers also must notify those individuals about when their premium assistance ends, and whether they may be eligible for regular COBRA coverage or coverage under a group health plan, such as through the Health Insurance Marketplace.

Return the forms to your employer

3. To claim the premium assistance credit, employers should report the credit and number of individuals receiving assistance on your federal employment tax return, usually Form 941. You can reduce the deposits of federal employment taxes up to the amount of the anticipated credit, and request an advance of the amount of the anticipated credit that exceeds the federal employment tax deposits available for reduction by filing Form 7200. See the Form 7200 instructions and IRS Notice 2021-31 for more info.

Frequently Asked Questions

Find more information on premium assistance under the American Rescue Plan and in our guide for employers and advisers.​

If you need additional help, please visit our Ask EBSA page or call 1.866.444.3272.


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