UPDATED: IRS Releases Guidance on COBRA Premium Assistance under ARPA
On May 18, the Internal Revenue Service (IRS) released Notice 2021-31 (the Notice), providing much-anticipated guidance regarding the COBRA premium assistance and tax credit provisions of the American Rescue Plan Act of 2021 (ARPA). Under ARPA, group health plans subject to COBRA – including state continuation coverage laws – are required to provide free continuation coverage and expanded enrollment rights to those who qualify as assistance eligible individuals. To offset these costs, tax credits will be made available.