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ARTICLE · 21 JUNE 2021

IRS Uncoils COBRA Subsidy Guidance!

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The Notice provides extensive guidance in the form of 86 Q&As covering a range of issues related to the administration and implementation of the Subsidy.

United StatesEmployment and HR
Katie Bjornstad Amin
Katie Bjornstad Amin
David Block
David Block
Christine Keller
Christine Keller
Seth Perretta
Seth Perretta
Malcolm Slee
Malcolm Slee
Christy Tinnes
Christy Tinnes
Brigen Winters
Brigen Winters
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On May 18, 2021, the IRS released its highly anticipated guidance on the 100% COBRA premium subsidies (the "Subsidy") and the related tax credit under the American Rescue Plan Act of 2021 (March 11, 2021) ("ARPA") in Notice 2021-31 (the "Notice"). See our previous alert for a more detailed description of the ARPA subsidy provisions along with our previous alert on the preceding Department of Labor guidance (April 7, 2021). The Notice provides extensive guidance in the form of 86 Q&As covering a range of issues related to the administration and implementation of the Subsidy.

The IRS previously published FAQ guidance in 2009 related to a similar 65% COBRA premium subsidy under the American Recovery and Reinvestment Act ("ARRA"). While waiting for the IRS to issue new guidance under ARPA, most employers and insurers looked to the previous ARRA guidance as an indication of how the IRS might land on important issues. While the Notice largely tracks the 2009 guidance,

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