On July 26, 2021, the IRS issued Notice 2021-46, which provides additional Q&A guidance on the temporary 100% COBRA premium subsidy (and the related tax credit) provided by the American Rescue Plan Act of 2021 (the ARP, enacted on March 11, 2021). Under the ARP, the COBRA premium subsidy is available to any assistance eligible individual (AEI) who loses employer-sponsored group health coverage due to a reduction in hours or involuntary termination of employment and whose COBRA continuation coverage period overlaps the six-month COBRA subsidy period (April 1, 2021 to September 30, 2021) to any extent.
Notice 2021-46 supplements earlier guidance provided in IRS Notice 2021-31 (a set of 86 Q&As issued on May 18, 2021) and also addresses additional issues.
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