e-Alerts

e-Alert: Additional IRS Q&A’s on American Rescue Plan’s COBRA Subsidy

By August 16, 2021 No Comments

Background

On July 26, 2021, the IRS issued Notice 2021-46, which provides guidance on the application of the American Rescue Plan Act (ARPA) subsidy for health coverage offered through the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Summary

Earlier guidance was issued on May 18, 2021; Notice 2021-46 expands on the following:

  • Subsidy availability to individuals who are eligible and had not elected it;
  • Whether subsidies that include dental or vision coverage end due to eligibility for other coverage that excludes dental or vision;
  • Whether employers may claim a tax credit if they pay COBRA premiums; and
  • Whether a party can claim a tax credit in situations where the involved parties are not the insurer or common law employer providing COBRA coverage.

Employers Next Steps

  • Employers should review the IRS Q&A Guide for additional information on ARPA.
  • If you have further questions regarding this e-Alert, please email us.

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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.

 

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