UPDATED: IRS Releases Guidance on COBRA Premium Assistance under ARPA
On July 26, 2021, the IRS released additional guidance in the form of eleven new questions and answers on various aspects of ARPA’s COBRA premium assistance and extended election period provisions – particularly the process of claiming the premium assistance tax credit.
On May 18, 2021, 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.