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Good News and Bad News: The IRS Issues 86 Q&A’s on the ARPA COBRA Subsidy

By Renee Lieux & Kimberly Weibley on May 21, 2021
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On May 18, 2021, the IRS issued the long- awaited guidance on the COBRA subsidy and premium assistance credit available under the American Rescue Plan Act of 2021 through eighty-six questions and answers.  The Notice addresses eligibility, reduction in hours, involuntary termination of employment, coverage eligible for premium assistance, beginning and end of the premium assistance period, extended elections, calculation of the premium assistance credit and other common questions.

The bad news is the plethora of questions.  The good news is that an employer may rely upon an employee’s attestation in determining if an individual is an Assistance Eligible Individual, unless the employer has actual knowledge that the individual’s attestation is incorrect.  The employer should keep the employee’s attestation as documentation that the individual was eligible for the premium assistance.

One item of note that was addressed in the Notice is the disqualifying factor of being “eligible for other group health plan coverage”.  The Notice explains that an individual who may be eligible for other group health coverage would be eligible for the COBRA premium assistance (1) during any waiting period in the new group health plan and (2) if an open enrollment period was not available under the new plan between April 1, 2021 and September 30, 2021.  However, the IRS also indicated that if an individual was able to enroll in other group health plan coverage as a result of the special enrollment period due to the Emergency Relief Notices, then the individual is not eligible for premium assistance.  Luckily, the employer may rely upon the individual’s attestation with respect to being eligible for other group health plan coverage and is not required to investigate the terms of other group health plan’s eligibility requirements.

Another item of note for employers with less than 20 employees.  If your plan is fully insured, your insurance carrier is responsible for the premium assistance.  If your plan is self-funded and not subject to Pennsylvania’s mini-COBRA laws, you are not required to offer premium assistance.

Read the entire IRS Notice here.

For more information on how this change affects your plan and other recent changes in employment law, register here for the McNees 2021 Labor & Employment Seminar to be held virtually on June 10th and 11th.  Topics will include:

  • Employee Benefits in the COVID (and Post-COVID) Era
  • 2020 The Year Best Suited for the Rear View
  • Biden’s Labor Board: What’s on the Agenda (Again)?
  • Diversity, Equity & Inclusion Fundamentals for HR Professionals
  • Workplace Safety: In the Era of COVID and Medical Marijuana
  • ADA/FMLA/WC Scenarios: HR’s Role in Managing Employees with Mental Health Issues
  • Litigation Trends: Privacy, Pay, Equity, COVID, ADR, Going Virtual
  • Perils of the Digital World: An Employer’s Guide to Dealing with Data Breaches
  • Wage & Hour Law in 2021 (and Beyond): Keeping Up with Changes in Federal and State Law
  • Posted in:
    Employment & Labor
  • Blog:
    Pennsylvania Labor & Employment Blog
  • Organization:
    McNees Wallace & Nurick LLC
  • Article: View Original Source

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