On May 18, 2021, the IRS issued Notice 2021-31, which provides guidance on the COBRA subsidy created by the American Rescue Plan Act (ARPA).
Notice 2021-31 provides guidance for employers, plan administrators, and health insurers regarding the new credit available to them for providing continuation health coverage to certain individuals under COBRA.
The guidance includes an overview and explanation of the subsidy, and provides an FAQ which includes 86 responses covering the following topics:
The full IRS notice which includes the FAQ can be found here
The ARPA subsidy covers 100% of COBRA and state mini-COBRA premiums from April 1 through September 30, 2021, for certain COBRA eligible individuals whose hours were reduced or whose employment was involuntarily terminated. Employers pay the premium up front and are reimbursed via tax credit on quarterly taxes.
For additional information on COBRA and the ARPA subsidy, please contact us at info@jtsfs.com and the JTS Compliance Department will be in touch to further assist you.