COBRA premium subsidy available for eligible individuals

Thu, 05/20/2021

The federal American Rescue Plan Act of 2021 created a 100-percent subsidy of the COBRA monthly premium for eligible individuals from April 1 through September 30, 2021.

If we identify you as someone who might be eligible for this subsidy, we will mail you a letter no later than May 31, 2021, explaining how to apply for the subsidy and providing the forms you will need. Those who become newly eligible for continuation coverage from June 1 through September 1 will also receive a letter and paper forms.

What does this mean for me?

If you are eligible for the subsidy, the federal government will pay your monthly premiums and applicable premium surcharges for up to six months of PEBB or SEBB Continuation Coverage, or PEBB retiree insurance coverage.

The subsidy can last from April 1 through September 30, 2021. However, it will end earlier if you:

  • Become eligible to enroll in other group coverage or Medicare.
  • Reach the end of your eligibility period for COBRA (usually 18 months after the termination or reduction of hours).

If either of these events happens while you are receiving the subsidy, submit a Notice of Expiration of Premium Assistance form to terminate your subsidy. If you do not, you may be subject to a $250 tax penalty.

Who’s eligible?

You may be eligible for the subsidy if you or a family member have lost PEBB or SEBB health coverage because of a reduction in hours or an involuntary termination from employment, and you are within your eligibility window for COBRA coverage (usually 18 months).

Some retirees may also be eligible if their retirement was not voluntary — for example, if you enrolled in retiree coverage because you were laid off.

Your dependents may also be eligible if they were enrolled on your employer coverage and are still eligible for COBRA.

  • If you add a spouse or partner after your loss of coverage because you have a special open enrollment, your spouse or partner will not be eligible for the subsidy.
  • Children born or adopted while the subscriber is enrolled in continuation coverage are eligible for the subsidy and can be added to their COBRA coverage.

If you are eligible for other group coverage, such as through a new employer’s plan, a spouse’s employer plan, or Medicare, you are not eligible for this subsidy. However, if you have individual market health insurance coverage or Medicaid, you may be eligible for the subsidy. You will not be eligible for a premium tax credit, or advance payments of the credit, for Health Insurance Marketplace coverage for months that you are enrolled in COBRA.

How do I know if I’m eligible?

If we identify you as someone who might be eligible for this subsidy, we will mail you a letter no later than May 31, 2021, explaining how to apply for the subsidy and providing the forms you will need.

Even if you don’t receive a letter, you can apply for the subsidy if you think you might be eligible.

If I’m eligible for the subsidy, how do I apply for it?

If we identify you as someone who might be eligible for this subsidy, we will mail you a letter no later than May 31, 2021, explaining how to apply for the subsidy and providing the forms you will need. We must receive these forms no later than 60 days after the date of the letter we mailed you.

If you are already enrolled in PEBB or SEBB Continuation Coverage or PEBB retiree insurance coverage, and you believe you are eligible for the subsidy, submit the Request for Treatment as an Assistance Eligible Individual (PEBB subscribers or SEBB subscribers) to apply.

If you are not currently enrolled in continuation coverage or retiree coverage, and you receive a letter about the subsidy, submit the forms listed below for your program.

PEBB employees, continuation coverage subscribers, and non-Medicare retirees:

SEBB employees and Continuation Coverage subscribers:

How do I submit my subsidy forms?

Please register for an account to submit your forms by secure online message Creating an account protects your privacy and sensitive health information. This account is separate from My Account.

You can also fax your forms to 1-360-725-0771 or mail them to the address below.

Health Care Authority
PO Box 42684
Olympia, WA 98504-2684

You do not need to submit payment with your forms. If you have already paid for any month that you are eligible for the subsidy, we will send you a refund. Due to system limitations, we are not able to hold or credit your payments for future months’ coverage after the subsidy ends.

What happens when the subsidy ends?

If you are still eligible and want to stay enrolled in continuation coverage or retiree insurance coverage after the subsidy ends, you will need to start (or resume) paying the monthly premiums and applicable premium surcharges on October 1, 2021. We will send more information about this step when your eligibility for the subsidy nears its end.

If you decide to terminate your continuation coverage when the subsidy ends, your coverage will end on the last day of the month in which we receive your written notice. If we receive your notice on the first day of the month, coverage will end on the last day of the previous month.

When the subsidy ends, you may qualify for a special enrollment period to enroll in coverage available through:

Important financial effects

  • If you enroll in a consumer-directed health plan or high-deductible health plan with a health savings account (HSA), you will not receive employer contributions for your HSA while you are receiving the subsidy.
  • Receiving the premium subsidy disqualifies you for the Health Coverage Tax Credit (HCTC) on your 2021 income taxes. You cannot be enrolled in an HCTC during the premium subsidy period.
  • You cannot qualify for a premium tax credit to help pay for coverage through the Health Insurance Marketplace for any months that you are enrolled in PEBB or SEBB Continuation Coverage — with or without the subsidy.

Where can I learn more?

To learn more about your continuation coverage rights, read the guide for your program: