IRS Answers Questions on COBRA Premium Assistance Credits
May 26, 2021
IRS Answers Questions on COBRA Premium Assistance Credits

The IRS recently provided new guidance for employers on the federal government's 100-percent premium subsidy to eligible COBRA health care enrollees, for coverage between April 1 and Sept. 30.

IRS Notice 2021-31, released May 18, answers questions raised by employers, plan administrators and health insurers regarding the COBRA subsidy's payroll tax credit. The subsidy was part of the American Rescue Plan Act (ARPA) signed into law in March.

The subsidy applies to assistance eligible individuals (AEIs) who elect COBRA health care continuation coverage following a reduction in hours or an involuntary termination of employment. The subsidy also is available during the April through September coverage period for employees eligible to elect continuation coverage under state laws, sometimes referred to as "mini-COBRAs," even if employees have exceeded the 18 months of coverage generally available for COBRA under federal la

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