Notice 2021-31 provides guidance on issues relating to the application of recently enacted § 9501 of the American Rescue Plan Act of 2021 (the ARP), which provides temporary premium assistance for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage. Section 9501 of the ARP provides for a full reduction in the premium otherwise payable by certain individuals and their families who elect COBRA continuation coverage due to a loss of coverage as the result of a reduction in hours or an involuntary termination of employment. The COBRA premium assistance is available beginning April 1, 2021 through September 30, 2021. The ARP also allows certain individuals a second chance to elect COBRA continuation coverage with the subsidy beginning April 1. The ARP also adds § 6432 to the Code, which provides a refundable payroll tax credit for an amount equal to the COBRA premium not paid by the individuals who receive the premium assistance.

Notice 2021-31 will appear in IRB 2021-23, dated June 7, 2021.