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COBRA, Unemployment, and the American Rescue Plan

The deadline for American Rescue Plan coverage is approaching. Here's how you can stay covered.

Unemployment levels are still high as a result of the ongoing COVID-19 pandemic with 9.5 million Americans without jobs - a rate of 5.9 percent.

Despite job losses, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows for unemployed Americans to still benefit from coverage for a limited time from their previous employers. The American Rescue Plan (ARP), signed by President Joe Biden, is a stimulus bill that was created to help soften the economic effects of the COVID-19 virus.

"The American Rescue Plan has notably strengthened access to health insurance," says Jae Oh, author of "Maximize Your Medicare." Due to the high number of job losses, the American Rescue Plan has altered some of COBRA's policies.

For starters, if you receive COBRA as a result of an involuntary end of employment, your employer is obligated to pay your COBRA premiums through the end of September. From that point, you will be responsible for your own premium.

If you've received unemployment benefits of any sort in 2021, there are additional advanced premium tax credits available to you. These tax credits will limit the cost of COBRA premiums, even up to 100%.

However, it is important to apply sooner rather than later for such benefits, as the deadline for enrollment is on August 15. The caveat is that you must use either the federal health insurance marketplace,, or your state-specific health insurance website.