Regulatory Updates

Regulatory Update: IRS Provides New Deadline, Guidance on COBRA Subsidies

Aug 31, 2021, 6:37 PM

(From Venable LLP) At the beginning of the year, the federal government, under the American Rescue Plan Act, created a subsidy for COBRA premiums. This subsidy will come to an end on September 30, 2021. Employers are required to provide notification of this expiration by September 15, 2021 to any individual receiving the subsidy. A model notice can be found here. In addition, the IRS recently published new guidance about the Federal Subsidy, which supplements the FAQs the IRS issued in May. Experts at Venable LLP point to the following key points of clarification under the latest IRS guidance related to the subsidy:

Extended coverage periods for eligible individuals whose 18-month, 29-month or 36-month COBRA period overlaps the subsidy period.
Eligibility for dental and vision coverage.
Entitlement to the tax credit for controlled groups, professional employer organizations and selling employers undergoing a merger or acquisition.