IRS Provides Additional Guidance on the COBRA Subsidy
June 8th, 2021
On May 18, 2021, the IRS issued 86 FAQs regarding implementation of the 2021 COBRA premium assistance (or “COBRA subsidy”) and corresponding tax credit under the American Rescue Plan Act (“ARPA”). The FAQs provide helpful guidance explaining employer obligations regarding the COBRA subsidy for Assistance Eligible Individuals (“AEI”).
In addition, the guidance provides some helpful clarification with respect to the Emergency Relief Notices which requires plans to disregard certain periods beginning March 1, 2020 until 60 days after the announced end of the National Emergency (the “Outbreak Period”). This Emergency Relief runs until the earlier of:
- One year from the date the applicable person was first
eligible for the relief; or
- 60 days after the announced end of the National
Emergency (this date has not been announced).
The following provides highlights from the FAQs and is not an exhaustive summary. Employers should carefully review this guidance in full to understand their obligations.