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IRS Guidance on COBRA Premium Subsidy

Late Tuesday afternoon, the IRS released the eagerly anticipated guidance regarding the COBRA premium assistance provisions of the American Rescue Plan Act of 2021. This Notice 2021-31 contains 86 questions and answers. Among the issues discussed, this Notice addresses who is eligible for this COBRA premium assistance and what constitutes a reduction in hours of employment or an involuntary termination of employment that makes an individual eligible for the COBRA premium assistance. The Notice addresses what coverage is eligible for the premium assistance, the period of time that the premium assistance is available, and the extended election period for COBRA coverage. The Notice also provides clarity on how the credit for providing the premium assistance is calculated and the means of receiving the credit.