The IRS recently issued FAQs regarding the temporary, 100% COBRA subsidy created by the American Rescue Plan Act of 2021 (“Rescue Plan Act”). This subsidy is available to “Assistance Eligible Individuals” for COBRA continuation coverage during the period April 1, 2021 through September 30, 2021. We previously covered developments relating to the COBRA subsidy in our prior posts on April 13th and March 29th.
Under the Rescue Plan Act, employers must advance and then claim reimbursement for the COBRA subsidy through a premium credit against their Medicare taxes. This new IRS guidance, Notice 2021-31, offers guidance on a variety of topics, including who is eligible for the subsidy and the meaning of “involuntary termination” of employment. We’ve pulled a few notable takeaways from these FAQs, which you can find here.