IRS Releases COBRA Subsidy Guidance

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May 24, 2021, 2 Minute Read

Last week the IRS published guidance on the COBRA Subsidy introduced in the American Rescue Plan Act. BRI has produced a summary of the guidance to help employers, brokers, and administrators better understand and manage the subsidy.

COBRA Subsidy FAQ Key Takeaways

Employers need to consider facts and circumstances when determining if a termination was voluntary or involuntary. (Questions 24-34).
Employers who have fallen below the employee count threshold for COBRA but who were subject to COBRA during the lookback period are required to offer a subsidy (Question 45).
Employers who are not subject to Federal COBRA but are subject to state COBRA requirements are not required to provide a subsidy. (Question 52)
In general, if premiums were subsidized by the employer, only portions which were payable by the Assistance Eligible Individual are eligible for a Federal subsidy (Question 64).
Employers who violate COBRA rules could be subject to penalties equal to $100 per qualified beneficiary or $200 per family for every day that the COBRA rules are violated.
Eligibility and various scenarios are provided in IRS Notice 2021-31.

BRI Resources

COBRA FAQ Summary
Includes: Eligibility, Notifications & Election Periods, Premiums & Billing, Administrative Procedures & Actions, and Other Special Considerations
Flowchart: Am I Eligible for The COBRA Subsidy?
Legislative Frenzy Webinar and Slides
Additional COBRA Subsidy materials.

To learn more, visit the U.S. Department of Labor (DOL) Employee Benefits Security Administration and the U.S. Department of Health & Human Services (HHS).

Contact us at 800.696.4543 or info@claremontcompanies.com for assistance when you’re ready to enroll a group in a BRI plan.

Questions?
Contact your Claremont team at 800.696.4543 or info@claremontcompanies.com.

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