IRS Releases Additional Guidance on ARPA and the COBRA Premium Subsidy
MAY 19, 2021
The IRS has released the long awaited COBRA subsidy FAQ.
On May 18th, the IRS released the long awaited additional guidance regarding the COBRA premium assistance provisions of the American Rescue Plan Act of 2021. The 41 page document contains 86 questions and answers.
Among the key takeaways, the Notice addresses who is eligible for this COBRA premium assistance and what constitutes a reduction in hours of employment or an involuntary termination of employment that makes an individual eligible for the COBRA premium assistance. The Notice addresses what coverage is eligible for the premium assistance, the period of time that the premium assistance is available, and the extended election period for COBRA coverage. The Notice also provides clarity on how the credit for providing the premium assistance is calculated and the means of receiving the credit.
The FAQ provides many example scenarios to help clarify how to handle certain circumstances.
Please find a direct link to Notice 2021-31 here.