As previously announced, the American Rescue Plan Act of 2021 (ARPA), enacted on March 11, 2021, subsidizes the full continuation coverage premium for “Assistance Eligible Individuals” (AEIs) for periods of coverage from April 1, 2021, through September 30, 2021.
To assist groups with fewer than 20 employees during the state continuation subsidy period, Medical Mutual has received guidance to directly apply for federal tax credits for eligible existing state continuation contracts if the member completes a new AEI 2021 Subsidy Eligibility Attestation Form.
Previously, groups were billed for state continuation premiums after they collected the premium payments from the employee. However, with a completed and signed attestation form, Medical Mutual can apply for the tax credit directly and both the group and member will be exempt from making those payments.
Medical Mutual will send the form (with a letter) to groups to distribute to all identified AEIs, who must complete, sign, and return it to their group official. The group official must then complete the “Group Use Only” section, which includes the subsidized amount of that member’s premium, and return the completed form to Medical Mutual.
Note: Some employers are subsidizing a portion of the member’s state continuation premium. If they are offering a subsidy, they cannot claim a tax credit for that part of the premium and they will need to continue paying it.
While groups will continue to see state continuation premiums for eligible existing state continuation contracts on their invoices, they will also see credits applied.
Contact your Cornerstone representative with any questions.