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May 18, 2021

IRS issues guidance on premium assistance and a tax credit for continuation health coverage

The IRS has announced (IR-2021-115) new guidance (Notice 2021-31) on a tax credit, added under the American Rescue Plan Act of 2021, that is available to employers, plan administrators and health insurers for providing COBRA continuation health coverage to certain individuals. Notice 2021-31 provides information on how the credit is calculated, who is eligible, what the premium assistance period is, and more to help employers, plan administrators and insurers understand the credit.