<figure>
 <img src="https://media.eaglewebservices.com/public/2020/9/1599869632873.png" alt="" />
 <figcaption></figcaption>
 </figure>IRSWASHINGTON
 — The Internal Revenue Service today provided guidance on tax breaks 
under the American Rescue Plan Act of 2021 for continuation health 
coverage under the Consolidated Omnibus Budget Reconciliation Act of 
1985 (COBRA).<a href="https://www.irs.gov/pub/irs-drop/n-21-31.pdf">Notice 2021-31&nbsp;PDF</a>
 provides guidance for employers, plan administrators, and health 
insurers regarding the new credit available to them for providing 
continuation health coverage to certain individuals under COBRA.The American Rescue Plan provides a temporary 100% reduction in the 
premium that individuals would have to pay when they elect COBRA 
continuation health coverage following a reduction in hours or an 
involuntary termination of employment. The new law provides a 
corresponding tax credit for the entities that maintain group health 
plans, such as employers, multiemployer plans, and insurers. The 100% 
reduction in the premium and the credit are also available with respect 
to continuation coverage provided for those events under comparable 
State laws, sometimes referred to as "mini-COBRA."Notice 2021-31 provides information regarding the calculation of the 
credit, the eligibility of individuals, the premium assistance period, 
and other information vital to employers, plan administrators, and 
insurers to understand the credit.COBRA provides certain former employees, retirees, spouses, former 
spouses, and dependent children the right to temporary continuation of 
health coverage at group rates. COBRA generally covers health plans 
maintained by private-sector employers with 20 or more full and 
part-time employees. It also covers employee organizations or federal, 
state or local governments. State mini-COBRA laws often provide similar 
benefits for insured small employers not subject to Federal COBRA.The IRS will continue to update <a href="https://www.irs.gov/coronavirus/coronavirus-tax-relief-for-health-plans-and-retirement-plans">information related to health plans</a> on IRS.gov.

IRS outlines tax relief, credits for COBRA health plans