The Internal Revenue Service (IRS) recently issued new guidance in an effort to clarify the COBRA premium assistance and credit available under the American Rescue Plan Act (ARPA).
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) established continued health coverage for employees experiencing a reduction in hours or involuntary termination. Under the ARPA, eligible employees can temporarily claim a 100% reduction in COBRA premiums.
According to a recent article from Accounting Today, IRS Notice 2021-31 contains the following:
- Information for administering the new credit for employers, plan administrators, and health insurers.
- Guidelines pertaining to calculation, eligibility, and length of availability of the credit.
- Information regarding the corresponding tax credit for groups that use group health plans.
For more details, visit Accounting Today to read the article in full.