As part of the American Rescue Plan Act of 2021 (ARPA), employers are required to provide, a subsidy to employees and their qualified beneficiaries to pay 100% of the COBRA continuation premium for group health plan coverage. This subsidy applies only to “assistance eligible individuals,” who are eligible for COBRA as a result of an involuntary termination of employment or a reduction in hours and who are, or could have been, eligible for COBRA during the period of April 1, 2021 through September 30, 2021 (the “Subsidy Period”). An employer or plan to whom COBRA premiums are payable is entitled to a tax credit for the amount of the premium assistance.
