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COBRA Subsidy FAQs

COBRA guidance

1 minute read

The IRS published frequently asked questions (FAQs) on the American Rescue Plan Act subsidies for continuation of health coverage under COBRA. The FAQs cover a variety of topics including how to calculate and claim the credit.

The FAQs further clarify that:

  • Health Reimbursement Arrangements, dental-only plans, and vision-only plans are covered by the subsidy
  • Involuntary termination includes constructive discharge and termination for cause. It excludes gross misconduct
  • The subsidy is available for extended periods of COBRA coverage between April 1 and September 30, 2021, due to a disability, second qualifying event, or extension under state mini-COBRA

Employers should review the FAQs and ensure that they are in compliance, especially with respect to notice and documentation obligations.

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This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Ken Zastrow

Ken Zastrow

Ken Zastrow enjoys establishing a strong rapport with his clients. He believes that education is key in helping them understand their benefit plans. Ken has a strong background in both active and post-employment benefit strategies. As Employee Benefits Consultant at National Insurance Services, Ken is responsible for the overall assessment and management of all an employer’s benefit plans including claim reconciliation, policy changes, renewals, and medical and dental analytics. He is also well versed in compliance, benefit integration, and early retiree benefits. Ken is a licensed health and life insurance agent, working with schools, cities, and counties in the Midwest Region.