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<< Older News  |  June 13, 2021

News

All News > ARPA

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Calculating the ARPA COBRA Premium Subsidy Tax Credit
Proskauer Link to more items from this source
[Guidance Overview]
June 11, 2021

"[T]he calculations may be less than straightforward depending on the facts and circumstances, particularly where post-termination coverage is subsidized, or if the plan voluntarily provides continued coverage to individuals who are not otherwise qualified beneficiaries."

Tags: ARPA  •  COBRA

Text of IRS FAQs: Tax Credits for Paid Leave Under ARPA for Leave After March 31, 2021
Internal Revenue Service [IRS] Link to more items from this source
[Official Guidance]
June 11, 2021

"These FAQs address the tax credits available under the American Rescue Plan Act of 2021 (the 'ARP') by employers with fewer than 500 employees and certain governmental employers without regard to the number of employees ('Eligible Employers') for qualified sick and family leave wages ('qualified leave wages') paid with respect to leave taken by employees beginning on April 1, 2021, through September 30, 2021, as well as the equivalent credits available for certain self-employed individuals."

[Editor's note: The IRS has published separate FAQs about tax credits that may be claimed for qualified leave wages paid with respect to leave taken by employees prior to April 1, 2021, under the FFCRA and the COVID-related Tax Relief Act, at Tax Credits for Paid Leave Under the [FFCRA] for Leave Prior to April 1, 2021 FAQs.]

Tags: ARPA  •  Coronavirus (COVID-19)  •  FMLA and Other Leave

A Word from the IRS on Involuntary Terminations of Employment for Purposes of the ARPA COBRA Premium Subsidy
Proskauer Link to more items from this source
[Guidance Overview]
June 10, 2021

"Even if a termination is labeled as 'voluntary' or is designated as a resignation, it won't necessarily be voluntary for ARP purposes. [Notice 2021-31] explains that such a termination will be involuntary if the circumstances indicate that the employee was willing and able to work and, absent the employee's termination, the employer would have terminated the employee and the employee had knowledge of that."

Tags: ARPA  •  COBRA

How Do Multiemployer Plans Claim the COBRA Premium Assistance Credit?
International Foundation of Employee Benefit Plans [IFEBP] Link to more items from this source
[Guidance Overview]
June 9, 2021

"Some multiemployer plans face a unique issue: they pay COBRA premiums on behalf of participants and beneficiaries but do not have any employees or employment tax liability. Those plans do not have any withheld taxes to retain or otherwise fund the COBRA premiums while waiting for a subsidy from the IRS."

Tags: ARPA  •  COBRA  •  Multiemployer Plans

IRS Notice 2021-31: COBRA Subsidy Calculation and Claiming the Credit
TRI-AD Link to more items from this source
[Guidance Overview]
June 9, 2021

"The premium payee may claim the subsidy credit even if an AEI fails to notify the employer/plan administrator that they are eligible for other group health plan coverage or Medicare. The premium payee is not required to refund to the IRS the subsidy credit arising after the AEI's subsidy ended unless they were aware that the AEI was not entitled to the subsidy."

Tags: ARPA  •  COBRA

The 411 on the 941: Everything You Need to Know About How to Claim the COBRA Subsidy Tax Credits
Groom Law Group Link to more items from this source
[Guidance Overview]
June 7, 2021

"Notice 2021-31 provides some direction regarding the rules for claiming the tax credit.... [T]he IRS has released the draft Forms and Instructions for claiming the COBRA subsidy tax credit -- Forms 941 (along with Schedule R) and 7200. [In this article] are answers to some of the questions ... about the draft Form 941. Keep in mind the next Form 941 is due on July 31, 2021, but employers and insurers can generally begin reducing their employment tax deposits now."

Tags: ARPA  •  COBRA

IRS Releases Guidance on COBRA Subsidies and Tax Credits
EPIC Link to more items from this source
[Guidance Overview]
June 7, 2021

"[Notice 2021-31] reiterates that ... an AEI's premium subsidy period can end before September 30, 2021.... According to the FAQs, an AEI who is currently enrolled in individual health insurance coverage through a Health Insurance Exchange may still be eligible to elect COBRA and receive premium assistance.... An employer may allow an AEI to elect coverage different from the coverage under the plan in which the individual was enrolled before the qualifying event, and the subsidy will apply to that newly elected coverage."

Tags: ARPA  •  COBRA

All Good Subsidies Must Come to an End: The IRS Adds Some Nuances
Proskauer Link to more items from this source
[Guidance Overview]
June 4, 2021

"In [Notice 2021-31], the IRS explained that, for individuals still eligible for the premium subsidy on September 30th, the subsidy ... continues until the end of the last 'period of coverage' beginning on or before September 30, 2021.... Additionally, the IRS guidance specified that the death of the employee or former employee who experienced the reduction in hours or involuntary termination will not end their spouse's or children's eligibility for the COBRA subsidy."

Tags: ARPA  •  COBRA

How to Apply the IRS's COBRA Premium Subsidy Guidance
McDermott Will & Emery Link to more items from this source
[Guidance Overview]
June 3, 2021

"Employers are allowed to revise the subsidy they have offered to employees in order to get reimbursed for the entire ARPA subsidy amount; however, if the employer has contractually agreed to subsidize COBRA, such a change may require an amendment to the severance plan or other agreements. Such amendments may result in procuring new waivers."

Tags: ARPA  •  COBRA

Monthly Update: Health and Welfare Plan Lunch Group (PDF)
Alston & Bird Link to more items from this source
[Guidance Overview]
June 3, 2021

30 pages. Topics: [1] Washington update; [2] ARPA FAQs and guidance; [3] New EEOC vaccine guidance; and [4] IRS Notice 2021-26 dependent care guidance.

Tags: ARPA  •  COBRA  •  Dependent Care  •  Health Plan Design

IRS Provides Guidance on COBRA Subsidies Under the American Rescue Plan Act
DLA Piper Link to more items from this source
[Guidance Overview]
June 2, 2021

"[Notice 2021-31 provides that,] if an individual does not elect COBRA and enrolls in coverage under another group health plan, but then ceases to be covered by the other group health plan as of April 1, that prior coverage does not end the period of eligibility for COBRA continuation coverage and does not disqualify the individual from premium assistance."

Tags: ARPA  •  COBRA

The IRS Giveth and Then Giveth Again: New DCAP Guidance Provides Welcome Tax Relief
Ogletree Deakins Link to more items from this source
[Guidance Overview]
June 2, 2021

"According to [IRS Notice 2021-26], not only may a participant carry over the full unused amount from 2020 and use that amount in 2021 tax free, the participant also may elect to contribute up to $10,500 in 2021, resulting in a total non-taxable benefit of up to $15,500 from the DCAP in 2021."

Tags: ARPA  •  Dependent Care

Multiemployer Pension Plans Potentially Eligible for Special Financial Assistance Under ARPA
Congressional Research Service [CRS] Link to more items from this source
June 1, 2021

58 pages. "The report provides [1] background on multiemployer DB pension plans, [2] an overview of the special financial assistance, [3] a description of the four eligibility criteria, and [4] a listing of plans (along with each plan's participant and funding data) that satisfy the eligibility criteria using the most recently available data." [CRS Report R46803, May 28, 2021]

Tags: ARPA  •  Funding of DB Plans  •  Multiemployer Plans

Editor's Pick IRS Issues Guidance on Federally Funded COBRA Premium Subsidy: What You Need to Know
Troutman Sanders Link to more items from this source
[Guidance Overview]
May 27, 2021

"Notice 2021-31 [provides] much needed guidance ... Loss of coverage due to a reduction in hours includes furloughs, lawful work stoppages, and voluntary reduction in hours.... Involuntary termination includes termination for good reason and constructive discharge.... An individual may become a potential AEI more than once."

Tags: ARPA  •  COBRA

IRS Finally Releases Guidance Implementing COBRA Subsidies But Leaves Important Questions Unanswered
The Wagner Law Group Link to more items from this source
[Guidance Overview]
May 27, 2021

"A dilemma remains for employers offering stand-alone dental or vision plans in addition to their major medical plans.... Notice 2021-31 is also clear that the extension of timeframes under emergency relief do not apply to the ARPA notice requirements or the extended election period.... The premium assistance credit is includible in the employer's gross income, and an employer is not eligible to receive the credit, if it is also claiming a credit for qualified health plan expenses under the FFCRA or for qualified wages under the CARES Act."

Tags: ARPA  •  COBRA

IRS Bites Into COBRA Subsidy Questions Under ARPA
Miller Johnson Link to more items from this source
[Guidance Overview]
May 26, 2021

"IRS Notice 2021-31 provides helpful clarifications about the eligibility of COBRA QBs for the COBRA subsidies, the subsidy period, the calculation of the Medicare tax credit, and more. This client alert highlights some of the key points in this new guidance."

Tags: ARPA  •  COBRA

IRS Answers ARPA COBRA Subsidy Questions
Vorys Link to more items from this source
[Guidance Overview]
May 26, 2021

"If an AEI's COBRA qualifying event was before April 1, 2021, ... the plan sponsor must make subsidized COBRA available starting as of April 1, 2021, [but] the IRS has now told us that an AEI has the option to waive subsidized COBRA for the period between April 1, 2021 and his or her actual election.... [T]he DOL model Extended Election Notice does not address or include any election mechanism for an AEI's option to waive COBRA coverage for the period between April 1, 2021 and an AEI's actual election."

Tags: ARPA  •  COBRA

Editor's Pick IRS Uncoils COBRA Subsidy Guidance
Groom Law Group Link to more items from this source
[Guidance Overview]
May 26, 2021

"The IRS previously published FAQ guidance in 2009 related to a similar 65% COBRA premium subsidy under the American Recovery and Reinvestment Act (ARRA).... While [Notice 2021-31] largely tracks the 2009 guidance, there are certain notable exceptions."

Tags: ARPA  •  COBRA  •  Coronavirus (COVID-19)

IRS Guidance on ARPA COBRA Subsidies: 86 Q&As and Counting
Epstein Becker Green Link to more items from this source
[Guidance Overview]
May 25, 2021

"Employers should be particularly mindful of novel working arrangements during the COVID-19 pandemic, which may fall within the definition of 'furlough.' ... The Q&As contain specific nuances regarding severance plans, separation agreements, and the ability to claim the premium tax credit."

Tags: ARPA  •  COBRA

American Rescue Plan Act's COBRA Premium Assistance: A New Ball Game and New Rules
Jackson Walker Link to more items from this source
[Guidance Overview]
May 25, 2021

"It is important to analyze whether a dependent or spouse is eligible for ARP premium assistance separately on an individual-by-individual basis based on the first qualifying event making them eligible for COBRA continuation coverage.... While an employer can rely on an individual's self-attestation that they are an assistance eligible individual, be careful ... so that [this] is not also an attestation that might apply for other purposes indicating the individual was involuntarily terminated for all purposes."

Tags: ARPA  •  COBRA

ARPA Premium Subsidy: Long-Awaited Details Finally Arrive
Verrill Dana LLP Link to more items from this source
[Guidance Overview]
May 25, 2021

"Who exactly are 'assistance eligible individuals' [AEIs]? To what type of benefits does the premium subsidy apply? How does the Outbreak Period Extension Guidance apply to the premium subsidy deadlines? And how is the tax credit claimed? [This article gives] a summary of the answers to these questions provided by [IRS Notice 2021-31]."

Tags: ARPA  •  COBRA

Editor's Pick IRS Weighs In on ARPA COBRA Subsidies, Including Some Surprises
Lockton Link to more items from this source
[Guidance Overview]
May 25, 2021

"The Service has offered a definition of 'involuntary termination of employment,' which largely comports to conventional wisdom but includes a couple head-scratching comments.... The IRS effectively eliminated the possibility of a more-than-18-month lookback for individuals with COBRA extensions by requiring that any subsidy-eligible individual riding an extension into the April 1–Sept. 30 subsidy window must have elected COBRA when first offered, and kept that coverage in force."

Tags: ARPA  •  COBRA

Tax-Free Dependent Care Assistance Program Benefits: Fewer Traps for the Unwary
Troutman Sanders Link to more items from this source
[Guidance Overview]
May 24, 2021

"IRS Notice 2021-26 clarifies the interplay between the carryover and 12-month grace period provisions of the Consolidated Appropriations Act, 2021 (CAA) and the increased Code Section 129 exclusion limit set forth in the ARPA."

Tags: ARPA  •  Consolidated Appropriations Act, 2021   •  Dependent Care

Editor's Pick ARPA COBRA Subsidy Guidance: IRS Notice 2021-31 and Emergency Relief Notices (PDF)
Jenner & Block Link to more items from this source
[Guidance Overview]
May 24, 2021

"This alert provides an overview of the reduction in hours and involuntary termination guidance contained in [Notice 2021-31], breaking down the types of terminations or reductions in hours that would give rise to COBRA subsidy eligibility during the subsidy window. This alert also covers the interplay between [the Act, the EBSA and IRS Joint Notice of May 4, 2020, and EBSA Disaster Relief Notice 2021-01]. These aspects of the Notice encompass myriad human resource scenarios that employers encounter on a day-to-day basis."

Tags: ARPA  •  COBRA  •  Coronavirus (COVID-19)

Editor's Pick IRS Provides Clarity on ARPA COBRA Subsidy's Impact on State Mini-COBRA Plans
Jackson Lewis P.C. Link to more items from this source
[Guidance Overview]
May 24, 2021

"Generally, the criteria to be an 'assistance eligible individual' for ARPA COBRA subsidy eligibility purposes applies equally to plans regardless of whether they are subject to federal COBRA or State mini-COBRA ... [T]he state continuation coverage need not be equal to or exceed the federal COBRA mandates to be 'comparable'.... The subsidy ... is generally only available for individuals who have either already elected and are paying for state continuation coverage or, who are newly eligible during the ARPA COBRA subsidy period."

Tags: ARPA  •  COBRA  •  Local Regulation


<< Older News  |  June 13, 2021

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