American Rescue Plan Act

Dear Fortiphi Insurance clients and friends- we wanted to take a few minutes to acknowledge the most recent American Rescue Plan Act (ARPA) that was signed into law on March 11, 2021.  The ARPA is a $1.9 trillion economic stimulus bill passed by the 117th United States’ Congress and signed into law by the President to speed up the United States’ recovery from the economic and health effects of the COVID-19 pandemic. While there are many important items within this law, we specifically wanted to share one of them that will have a direct impact on current Federal and State COBRA laws and administration.



ARPA allows Federal and State COBRA qualified beneficiaries (QB) to have 100% subsidized COBRA coverage from 04/01/2021 to 09/30/2021.  The 100% subsidy is fully covered by the Federal Government.



  • Anyone that was involuntary terminated or handed involuntary reduction of hours (leading to a termination of group benefits) starting on November 1, 2020.
  • The QB, if involuntary terminated and has COBRA time left, can get 100% paid-for COBRA.
    • No dependent COBRA events qualify.
    • There is no increase in COBRA time. The period is still only 18 months.
    • Anyone that terminated prior to 11/01/2020 would not qualify.
  • If the qualified beneficiary has not elected nor paid up to 03/31/2021, the QB still qualifies.
  • The qualified beneficiary will have to elect now and they can come back on COBRA starting 04/01/2021 to take advantage of the 100% subsidy.
    • The QB DOES NOT have to come back to their original loss of coverage date.
    • The QB can stay on for just the 6 months and then drop off.
    • The insurance carrier WILL NOT pay for any claims during gap of coverage.
      • For example, John Doe was terminated from ABC Company on 12/31/2020 with a COBRA start date of 01/01/2021. John does not elect COBRA.  John then gets a letter about the COBRA subsidy and elects to come on starting 04/01/2021.  John can elect and come on for 04/01/2021 not having to pay or be covered from 01/01/2021 to 03/31/2021.


Coverage Options

  • All COBRA eligible coverage; specifically, medical, dental, and vision.
  • Qualified beneficiaries can be allowed to change coverage if the group has more than one plan above from the plan they were currently on. It can only be a plan though that is LOWER COST than the plan they are currently on.
  • The qualified beneficiary can have 100% coverage paid for employee only, employee spouse, employee child(ren) or family coverage.
  • The qualified beneficiary can also add family members to the COBRA coverage with a change of status event.


Premium Payments and Reimbursements

Multiple scenarios will exist on premium reimbursements depending on where coverage is being purchased (ie: direct to the carrier or via an Association Health Plan). For groups with a COBRA contract with Fortiphi, you will continue to pay the invoices “as-billed” but instead of receiving a reimbursement from Fortiphi each month, the reimbursements for QB’s will come directly from your applicable insurance company. Self-funded employers will claim reimbursements for QB’s through a special payroll tax credit- further instructions from the State forthcoming.


Notifications and Timeframes

For groups with a COBRA contract with Fortiphi, we are targeting the week of April 5 to distribute the COBRA notices to QB’s. At this point we
are awaiting special safe harbor language form the Department of Labor before we can issue. Once the QB receive the new paperwork, they have 90 days to elect.

  • Current COBRA participants – if current participants were involuntarily terminated or reduced hours, we are advising they do not have to
    pay for COBRA premiums starting April – September.
  • Qualified Beneficiaries that never enrolled – we are advising they have to wait for the Federal Department of Labor to release the notice and we will notify them at that time. They will have 90 days to elect and then can enroll 04/01/2021 until their 18 months expires.  It can take up to 30 days to re-activate coverage, but coverage will start 04/01/2021.