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In the Bloomberg BNA Tax Management Compensation Planning Journal, Jackson Walker partner Greta E. Cowart authored an article on the American Rescue Plan Act’s COBRA subsidy.
Here is a preview of the article:
GENERAL OVERVIEWA subsidy designed to help with the payment of COBRA premiums was added for the period beginning on April 1, 2021, through September 30, 2021.1 Unlike previous COBRA premium subsidies, this new premium assistance lets assistance eligible individuals elect COBRA at no cost to the individual for the six-month period of premium assistance as a distinct improvement to the 65% discount allowed in the past.2 1 American Rescue Plan Act (ARPA), Pub. L. No. 117-2, §9501(a). |
ASSISTANCE ELIGIBLE INDIVIDUALS ARE THE ONLY PERSONS ELIGIBLE FOR THE SUBSIDYFull elimination of premiums is available to an individual who elects COBRA (as the result of the individual or the individual’s family member)3 losing coverage due (1) to termination of employment (other than for gross misconduct) or (2) to a reduction in hours of work that caused the in loss of coverage; except that, persons who ‘‘voluntarily terminated employment’’ are excluded from being assistance eligible individuals.4 A person who qualifies for the new assistance is referred to as an ‘‘assistance eligible individual.’’ The assistance eligible person definition includes persons who may already be on COBRA continuation coverage due to a termination of employment or reduction in hours which occurred prior to the enactment of the Relief Act, and individuals who could have been on COBRA continuation coverage, but only if they had elected coverage pro-vided such individuals’ maximum duration of cover-age has not expired.5 |
To download the PDF, view “The American Rescue Plan Act’s COBRA Subsidy – Déjà Vu But Different: Considering the Guidance Issued Through April 30, 2021.” The article was reproduced with permission from Tax Management Compensation Planning Journal, 49 CPJ 05, 05/10/2021. Copyright R 2021 by The Bureau of National Affairs, Inc.(800-372-1033). For more insights on tax and accounting, visit the Bloomberg Tax website.
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