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NYCDCC Welfare Fund: American Rescue Plan Act of 2021- COBRA Subsidies Information and FAQs

NYCDCC Welfare Fund: American Rescue Plan Act of 2021- COBRA Subsidies Information and FAQs

April 1, 2021

On March 11, 2021, the President signed the American Rescue Plan Act of 2021 (the “Rescue Plan”). The Rescue Plan provides a temporary 100% COBRA subsidy for eligible individuals. This means that the New York City District Council of Carpenters Welfare Fund (the “Fund”) will provide eligible individuals with up to six months of COBRA coverage at no cost between April 1, 2021 and September 30, 2021.

The following is a summary of the highlights of the COBRA subsidy:

  • There is a 100% COBRA premium subsidy (a./k./a “free COBRA”) for eligible members, spouses, and dependents between April 1, 2021 and September 30, 2021. No COBRA premiums will be due from eligible individuals for the six-month period between April and September of 2021.
  • You and your family are eligible for the subsidy if you lost coverage under the Fund due to your involuntary termination of employment or reduction of hours. Note that an involuntary termination of employment or reduction in hours is the only way to qualify for the subsidy. If you lost coverage due to a voluntary resignation of employment, or if your former spouse lost coverage due to divorce, or if your child lost coverage because she turned 26, the subsidy is not available. 
  • You will stop being eligible for the subsidy before September 30, 2021 if you become eligible for coverage under Medicare or another group health plan. You must notify the Fund Office if you become eligible for such coverage.
  • If you do not have a COBRA election in effect on April 1, 2021 (either because you did not previously elect COBRA or because you elected COBRA but then dropped it), but you would be eligible for the subsidy if you did have an election in place and your 18-month COBRA period has not yet expired, you are still eligible for the subsidy. If these circumstances apply to you, the Fund will send you a new COBRA “second chance” election notice by May 31, 2021, and you will have 60 days from after notice is provided to elect COBRA. You will not have to pay for any period of COBRA coverage that has passed.

Please read the following Frequently asked Questions (“FAQs”) for further details regarding the COBRA subsidy.

FREQUENTLY ASKED QUESTIONS ABOUT THE COBRA SUBSIDY

COBRA Subsidy

  1. What is the COBRA subsidy provided by the American Rescue Plan Act of 2021?

The Rescue Plan provides a 100% COBRA premium subsidy for eligible individuals for COBRA coverage beginning on April 1, 2021 and ending on September 30, 2021. Eligible individuals will not have to pay any premium in order to have COBRA coverage for this period of time. The federal government will reimburse the Fund the amount of the COBRA premium for eligible individuals who elect COBRA via a credit against the Fund’s payroll taxes or a refund.

  1. For how long is the COBRA subsidy available?

The COBRA subsidy is available for the six-month period between April 1, 2021 and September 30, 2021.

  1. Who is eligible for the COBRA subsidy?

The COBRA subsidy is available to any participant who lost coverage under the Welfare Fund due to an involuntary termination of employment or reduction of hours and who has not yet exhausted his/her 18-month COBRA period. The COBRA subsidy is also available to the participant’s spouse and dependents on the participant’s coverage at the time the participant lost coverage due to an involuntary termination of employment or reduction of hours.

  1. When will I receive my “second chance” COBRA notice?

The government will be issuing model notices for group health plans, like the Fund, to use to notify individuals of the COBRA subsidy. As soon as the model notices are issued, the Fund will send all eligible individuals a second chance COBRA notice. All election notices will be sent by the Fund by May 31, 2021. In the interim, if you need proof of coverage, please email us at COBRA@nyccbf.org.

  1. I did not elect COBRA when I was first eligible for COBRA and my 18-month maximum COBRA period has not yet expired. If I elect COBRA coverage beginning in April of 2021, will I be required to pay retroactive premiums for the period before the COBRA subsidy begins in April of 2021?

No. You will not be responsible for retroactive payments. You can elect COBRA coverage to begin on April 1, 2021 without having to pay premiums for the period before April 1, 2021. Keep in mind, however, that you will not have coverage for that prior period.

  1. I am eligible for COBRA because I voluntarily left my employment. Am I eligible for the COBRA subsidy?

No. The COBRA subsidy is only available if a participant lost coverage under the Welfare Fund due to an involuntary termination of employment or reduction of hours.

  1. I am eligible for the COBRA subsidy. However, I pre-paid my COBRA premiums through 2021. Am I entitled to a refund of the premiums I paid for April to September of 2021?

Yes. The Fund will issue you a refund as soon as possible.