Coronavirus Stimulus Bill, Federal Tax

IRS Guidance on ARPA COBRA Provision

The IRS has issued guidance on the American Rescue Plan Act provision that provides temporary premium assistance for COBRA continuation coverage and a credit to entities that maintain group health plans. The law provides a temporary 100% reduction in the premium that individuals would pay if they elect COBRA health coverage after a reduction in hours or an involuntary termination of employment. The law provides a corresponding tax credit for entities that maintain health plans, such as employers, multiemployer plans, and insurers. Notice 2021-31 provides details about calculating the credit, eligibility of individuals and other information for employers, plan administrators and insurers. Contact the Cg Team with questions. © 2021