IRS Releases Additional COBRA Subsidy Guidance
Quick Facts The IRS issued Notice 2021-31, which includes significant guidance on the American Rescue Plan Act of 2021 (ARPA) Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy. The guidance is clear that reductions in force, terminations for cause, layoffs, and other related terminations are to be treated as an involuntary termination. The guidance clarifies that the subsidy is available for all types of COBRA coverage except for health flexible spending accounts (FSAs). The Notice provides detailed guidance on how employers will recover premium assistance payments against their payroll tax liability. The process is similar to the credit taken for …
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