Good News and Bad News: IRS Publishes 86 Questions and Answers About ARP COBRA Grant | McNees Wallace and Nurick LLC
On May 18, 2021, the IRS released the long-awaited guidance on the COBRA Grant and Premium Assistance Credit available under the American Rescue Plan Act of 2021 through eighty-six questions and answers. The notice covers eligibility, reduction of hours, involuntary termination, eligible coverage for premium assistance, start and end of the premium assistance period, extended electives, premium assistance credit calculation and other common matters.
The bad news is the plethora of questions. The good news is that an employer can rely on an employee’s attestation to determine whether a person is eligible for assistance, unless the employer actually knows that the person’s attestation is incorrect. The employer should keep the employee’s attestation as a document certifying that the person was eligible for premium assistance.
One point of note that was addressed in the notice is the disqualifying factor of being “eligible for another group health plan”. The notice explains that a person who could be eligible for another group health coverage would be eligible for COBRA premium assistance (1) during any waiting period in the new group health plan and (2) if a Open enrollment period was not available under the new plan between April 1, 2021 and September 30, 2021. However, the IRS also reported that if a person was able to purchase other coverage from the plan group health care due to the special enrollment period due to emergency relief notices, then the individual is not eligible for premium assistance. Fortunately, the employer can rely on the individual’s certification of eligibility for another group health insurance plan and is not required to investigate the eligibility requirements of another plan. collective health insurance.
Another point to note for employers with less than 20 employees. If your plan is fully insured, your insurer is responsible for premium assistance. If your plan is self-funded and is not subject to Pennsylvania mini-COBRA laws, you are not required to offer premium support.
Read the full IRS notice here.