The IRS just released some new supplemental guidance on the COBRA premium subsidy in the American Rescue Plan Act (“ARP”). IRS Notice 2021-46, released July 26, 2021 provides additional color on a handful of discrete subsidy issues that had been addressed in earlier guidance but still caused some confusion. The guidance, in Q&A format, addresses:
- the availability of the subsidy during extended coverage periods due to disability determinations, second qualifying events, and state law extensions,
- ineligibility for the subsidy due to other group health coverage or Medicare,
- when a state continuation coverage program qualifies as “comparable” to federal COBRA coverage, and
- who is the “premium payee’ for purpose of claiming the tax credit, including in the context of controlled groups, MEWAs, and business reorganizations.
The Notice can be found here. For more information on how to claim the ARP COBRA tax credit, see our blog here.