# Bulletin No. 2021–23

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- **Collection:** Agency decision
- **Document type:** Agency decision

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HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2021–23
June 7, 2021

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

EMPLOYEE PLANS

INCOME TAX

Notice 2021-33, page 1190.

Notice 2021-34, page 1194.

This notice sets forth updates on the corporate bond ­monthly
yield curve, the corresponding spot segment rates for May
2021 used under § 417(e)(3)(D), the 24-month average segment rates applicable for May 2021, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)
(iv).

EMPLOYEE PLANS, EMPLOYMENT
TAX, EXCISE TAX

This notice provides the applicable reference price for qualified natural gas production from qualified marginal wells
during taxable years beginning in calendar year 2020 for the
purpose of determining the marginal well production credit
under §45I. The applicable reference price for taxable years
beginning in calendar year 2020 is $1.94 per 1,000 cubic
feet. The notice also provides the credit amount used for the
purpose of determining the marginal well production credit.
The credit amount for taxable years beginning in calendar
year 2020 is $0.66 per 1,000 cubic feet.

Notice 2021-31, page 1173.

Rev. Rul. 2021-9, page 1171.

This notice provides guidance on issues relating to the application of § 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 as well as certain
continuation coverage under State laws if the continuation
coverage is the result of a loss of coverage from a reduction in hours or involuntary termination of employment. The
ARP also allows certain individuals a second chance to
elect COBRA continuation coverage with the subsidy beginning April 1 and 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.

Finding Lists begin on page ii.

Federal rates; adjusted federal rates; adjusted federal longterm rate, and the long-term tax exempt rate. For purposes
of sections 382, 1274, 1288, 7872 and other sections of
the Code, tables set forth the rates for June 2021.

TAX CONVENTIONS
Announcement 2021-11, page 1196.

The Competent Authorities of the United States of America
and Switzerland entered into a Competent Authority Arrangement under paragraph 3 of Article 25 (Mutual Agreement
Procedure) listing U.S. and Swiss pension and retirement arrangements, which now include individual retirement plans,
that may be eligible for an exemption from withholding on
dividends under paragraph 3 of Article 10 (Dividends) provided that all other requirements of the Treaty are satisfied.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

June 7, 2021 

Bulletin No. 2021–23

Part I
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7872.)

Rev. Rul. 2021-9
This revenue ruling provides various prescribed rates for federal income

Annual
AFR
110% AFR
120% AFR
130% AFR

0.13%
0.14%
0.16%
0.17%

AFR
110% AFR
120% AFR
130% AFR
150% AFR
175% AFR

1.02%
1.12%
1.22%
1.33%
1.54%
1.80%

AFR
110% AFR
120% AFR
130% AFR

2.08%
2.29%
2.50%
2.71%

Short-term adjusted AFR
Mid-term adjusted AFR
Long-term adjusted AFR

Bulletin No. 2021–23

tax purposes for June 2021 (the current
month). Table 1 contains the shortterm, mid-term, and long-term applicable federal rates (AFR) for the current
month for purposes of section 1274(d)
of the Internal Revenue Code. Table 2
contains the short-term, mid-term, and
long-term adjusted applicable federal
rates (adjusted AFR) for the current
month for purposes of section 1288(b).
Table 3 sets forth the adjusted federal long-term rate and the long-term
tax-exempt rate described in section
382(f). Table 4 contains the appropri-

ate percentages for determining the
low-income housing credit described in
section 42(b)(1) for buildings placed in
service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service
after July 30, 2008, shall not be less
than 9%. Finally, Table 5 contains the
federal rate for determining the present
value of an annuity, an interest for life
or for a term of years, or a remainder or
a reversionary interest for purposes of
section 7520.

REV. RUL. 2021-9 TABLE 1
Applicable Federal Rates (AFR) for June 2021
Period for Compounding
Semiannual
Quarterly
Short-term
0.13%
0.13%
0.14%
0.14%
0.16%
0.16%
0.17%
0.17%
Mid-term
1.02%
1.02%
1.12%
1.12%
1.22%
1.22%
1.33%
1.33%
1.53%
1.53%
1.79%
1.79%
Long-term
2.07%
2.06%
2.28%
2.27%
2.48%
2.47%
2.69%
2.68%

Annual
0.10%
0.77%
1.58%

REV. RUL. 2021-9 TABLE 2
Adjusted AFR for June 2021
Period for Compounding
Semiannual
0.10%
0.77%
1.57%

1171

Quarterly
0.10%
0.77%
1.57%

Monthly
0.13%
0.14%
0.16%
0.17%
1.02%
1.12%
1.22%
1.33%
1.53%
1.78%
2.06%
2.27%
2.47%
2.68%

Monthly
0.10%
0.77%
1.56%

June 7, 2021

REV. RUL. 2021-9 TABLE 3
Rates Under Section 382 for June 2021
Adjusted federal long-term rate for the current month
Long-term tax-exempt rate for ownership changes during the current month (the highest of
the adjusted federal long-term rates for the current month and the prior two months.)

1.58%
1.64%

REV. RUL. 2021-9 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for June 2021
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July
30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit
7.35%
Appropriate percentage for the 30% present value low-income housing credit
3.15%

REV. RUL. 2021-9 TABLE 5
Rate Under Section 7520 for June 2021
Applicable federal rate for determining the present value of an annuity, an interest for life or a
term of years, or a remainder or reversionary interest

Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
June 2021. See Rev. Rul. 2021-9, page 1171.

Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
June 2021. See Rev. Rul. 2021-9, page 1171.

Section 382.—Limitation
on Net Operating Loss
Carryforwards and
Certain Built-In Losses
Following Ownership
Change
The adjusted applicable federal long-term rate
is set forth for the month of June 2021. See Rev.
Rul. 2021-9, page 1171.

Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
June 2021. See Rev. Rul. 2021-9, page 1171.

Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of June 2021. See Rev. Rul.
2021-9, page 1171.

Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term rates are set
forth for the month of June 2021. See Rev. Rul.
2021-9, page 1171.

1.2%

Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
June 2021. See Rev. Rul. 2021-9, page 1171.

Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of
June 2021. See Rev. Rul. 2021-9, page 1171.

Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of June 2021. See Rev. Rul.
2021-9, page 1171.

Section 7872.—Treatment
of Loans With BelowMarket Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
June 2021. See Rev. Rul. 2021-9, page 1171.

June 7, 2021

1172

Bulletin No. 2021–23

Part III
Premium Assistance for
COBRA Benefits
Notice 2021-31
This notice provides guidance on the
application of § 9501 of the American
Rescue Plan Act of 2021 (the ARP), Pub.
L. 117-2, 135 Stat. 4 (March 11, 2021),
relating to temporary premium assistance
for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage.1
BACKGROUND
Section 9501 of the ARP – COBRA
Premium Assistance
Section 9501 of the ARP provides for
a temporary 100 percent reduction in the
premium otherwise payable by certain individuals and their families who elect COBRA continuation coverage through the
Internal Revenue Code (Code), the Employee Retirement Income Security Act of
1974 (ERISA), or the Public Health Service Act (PHS Act) due to a loss of coverage as the result of a reduction in hours
or an involuntary termination of employment.2 The temporary premium assistance
is also available to individuals enrolled in
continuation health coverage under State
programs that provide for coverage comparable to COBRA continuation coverage, often referred to as “mini-COBRA.”
In this notice, continuation of health coverage under all of these provisions is referred to as “COBRA continuation coverage,” unless otherwise specified. Also, in

this notice, the temporary premium assistance available under the ARP is referred
to as “COBRA premium assistance” or
“premium assistance,” unless otherwise
specified.
Under § 9501(a)(3) of the ARP, an “Assistance Eligible Individual” is an individual (1) who is a qualified beneficiary with
respect to a period of COBRA continuation coverage during the period from April
1, 2021, through September 30, 2021, and
eligible for that COBRA continuation coverage by reason of a qualifying event specified in § 603(2) of ERISA, § 4980B(f)
(3)(B) of the Code, or § 2203(2) of PHS
Act, except for voluntary termination of
employment, and (2) who elects COBRA
continuation coverage. The ARP requires
that health insurance issuers and group
health plans treat Assistance Eligible Individuals as having paid the full amount of
their COBRA premium for the specified
coverage. The person to whom premiums
for COBRA continuation coverage are
payable (the employer, insurer, or multiemployer plan, as applicable) is entitled to
a refundable tax credit against its share of
Medicare taxes under newly added § 6432
of the Code.3
COBRA premium assistance is available as of the first period of coverage beginning on or after April 1, 2021, and will
not be available for periods of coverage
beginning after September 30, 2021. For
each Assistance Eligible Individual, COBRA premium assistance does not extend
beyond the period of COBRA continuation
coverage in the event that the period ends
prior to September 30, 2021. However,
premium assistance is not available if an
individual is eligible for coverage under

any other group health plan4 or for Medicare. If an individual receiving premium
assistance becomes eligible for coverage
under any other group health plan or for
Medicare, the premium assistance period
ends. An individual receiving premium
assistance who becomes eligible for coverage under any other group health plan or
Medicare is required to notify the group
health plan providing COBRA continuation coverage of eligibility for that other
coverage. If the individual fails to notify
the group health plan, the individual may
be subject to a penalty of $250 for each
failure. If the individual fraudulently fails
to notify the group health plan, the individual is subject to a penalty equal to the
greater of $250 or 110 percent of the premium assistance improperly received after
the end of eligibility for COBRA premium
assistance.
Under § 9501(a)(1)(B) of the ARP, an
employer may allow an Assistance Eligible Individual to elect coverage different
from the coverage under the plan in which
the individual was enrolled before the reduction in hours or involuntary termination of employment, and COBRA premium assistance will apply with respect to
that newly elected coverage.5 The premium for the different coverage option that
is offered may not exceed the premium for
the coverage the individual had before the
reduction in hours or involuntary termination of employment. In addition, the other
coverage offered under this option must be
coverage offered to similarly situated active employees and may not be coverage
that provides only excepted benefits (as
defined in § 9832(c) of the Code, § 733(c)
of ERISA, and § 2971(c) of PHS Act), a

Employer-sponsored health plans generally are required to offer an employee, spouse, or dependent child covered by the plan the opportunity to continue coverage under the plan for a
specified period of time after the occurrence of certain events that otherwise would have terminated the coverage (qualifying events). These continuation of coverage requirements, and
corresponding coverage (if elected), are often referred to as “COBRA continuation coverage” or “COBRA” requirements. The COBRA requirements were enacted originally as part of the
Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. 99-272 (April 7, 1986), and are set forth in § 4980B of the Internal Revenue Code.
2
COBRA continuation coverage under the Code, ERISA, and the PHS Act is also referred to in this notice as “Federal COBRA.”
3
Section 6432 was first added to the Code by the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5 (Feb. 17, 2009). It was later stricken by the Tax Technical Corrections Act
of 2018, Pub. L. 115-141 (March 23, 2018). The ARP restores § 6432 to the Code with certain modifications.
4
Eligibility for coverage under any other group health plan does not terminate eligibility for COBRA premium assistance if the other group health plan provides only excepted benefits (as
defined in § 9832(c) of the Code, § 733(c) of ERISA, and § 2971(c) of the PHS Act), is a health flexible spending arrangement (FSA) (as defined by § 106(c)(2) of the Code), or is a qualified small employer health reimbursement arrangement (as defined in § 9831(d)(2) of the Code) (QSEHRA). Whenever reference is made in this notice to the end of eligibility for COBRA
premium assistance due to eligibility for coverage under any other group health plan, coverage under these plans or arrangements is not taken into account. Additionally, eligibility for other
group health plan coverage (that is not an excepted benefit, a health FSA, or a QSEHRA) makes an individual ineligible for COBRA premium assistance even if the offer of other coverage
does not provide minimum value or is not affordable for purposes of the premium tax credit under § 36B.
5
Note that this provision does not modify the general requirement under Federal COBRA that a group health plan must allow a qualified beneficiary to elect to continue the coverage in which
the individual was enrolled as of the qualifying event.
1

Bulletin No. 2021–23

1173

June 7, 2021

health FSA (as defined by § 106(c)(2) of
the Code), or a QSEHRA (as defined in
§ 9831(d)(2) of the Code). If offered the
option to enroll in different coverage, the
Assistance Eligible Individual has 90 days
after the date of the notice of the option
to elect other coverage to elect the other
coverage.
Section 9501(a)(4) of the ARP provides an extended election period for certain individuals who did not have an election of COBRA continuation coverage in
effect on April 1, 2021, referred to in this
notice as the “ARP extended election period.” The ARP extended election period is
available for an individual who would be
an Assistance Eligible Individual if the individual had a COBRA continuation coverage election in effect on April 1, 2021,
or an individual who previously elected
COBRA continuation coverage and discontinued that coverage before April 1,
2021. The ARP extended election period
continues for 60 days after these individuals are provided notice of the extended
election period. The resulting COBRA
continuation coverage does not extend
beyond the maximum period of COBRA
continuation coverage that would have
been required under the applicable COBRA continuation coverage provision if
the individual had elected COBRA continuation coverage initially as required under
that applicable COBRA provision, or had
not discontinued the elected COBRA continuation coverage.
The plan must treat an Assistance Eligible Individual as having paid the full
premium. If the plan does not treat the
Assistance Eligible Individual as having
paid the full premium, the plan will have
failed to meet the applicable continuation
coverage requirements. Thus, in the case
of a plan subject to COBRA continuation
coverage requirements under § 4980B, the
failure to treat the Assistance Eligible Individual as having made the full payment
is a failure to satisfy the requirements of
§ 4980B and may result in the imposition
of the excise tax under § 4980B(b).
Section 6432 of the Code – COBRA
Premium Assistance Credit
The ARP adds § 6432 to the Code,
which provides that the “person to whom
premiums are payable for continuation

June 7, 2021

coverage” is allowed a “premium assistance credit” for each calendar quarter
against the tax imposed by § 3111(b),
or against so much of the taxes imposed
under § 3221(a) as are attributable to
the rate in effect under § 3111(b), of an
amount equal to the premiums not paid by
Assistance Eligible Individuals for COBRA continuation coverage by reason of
§ 9501(a)(1) of the ARP with respect to
that calendar quarter. If, for the calendar
quarter for which the credit is allowed,
the amount of the credit allowed is in
excess of the tax imposed by § 3111(b),
or so much of the taxes imposed under
§ 3221(a) as are attributable to the rate in
effect under § 3111(b), after reduction for
any credits allowed under §§ 3131, 3132,
and 3134, the excess is treated as an overpayment that is refunded under §§ 6402(a)
and 6413(b).
The “person to whom premiums are
payable” is (1) the multiemployer plan, in
the case of a group health plan that is a
multiemployer plan (as defined in § 3(37)
of ERISA); (2) the employer, in the case
of a group health plan, other than a multiemployer plan, that is (a) subject to Federal COBRA, or (b) under which some
or all of the coverage is not provided by
insurance (that is, a plan that is self-funded, in whole or in part); or (3) the insurer
providing the coverage, in the case of any
other group health plan not described in
(1) or (2) (generally, fully insured coverage subject to State continuation coverage
requirements, not Federal COBRA). In
this notice, the “person to whom premiums are payable” is sometimes referred to
as the “premium payee.”
Section 6432(c)(2)(C) provides that
any penalty under § 6656 for any failure
to make a deposit of the tax imposed by
§ 3111(b), or so much of the taxes imposed
under § 3221(a) as are attributable to the
rate in effect under § 3111(b), is waived if
the Secretary of the Treasury determines
that the failure was due to anticipation of
the premium assistance credit. Also, Notice 2021-24, 2021-18 IRB 1122, provides
that the penalty under § 6656 does not apply for any failure to timely deposit employment taxes (withheld income taxes,
taxes under the Federal Insurance Contributions Act (FICA), and taxes under the
Railroad Retirement Tax Act (RRTA)) if
(1) the employer is a person to whom pre-

1174

miums are payable, (2) the amount of employment taxes that the employer does not
timely deposit (after reduction for other
credits) is less than or equal to the amount
of the employer’s anticipated credits under § 6432(a) for the calendar quarter as
of the time of the required deposit, and (3)
the employer did not seek payment of an
advance credit by filing Form 7200 with
respect to the anticipated credits it relied upon to reduce its deposits. Section
6432(f) extends the statute of limitations
for the assessment of any amount attributable to the credit to 5 years after the later
of (1) the date on which the original return
which includes the calendar quarter with
respect to which the credit is determined
is filed, or (2) the date on which that return is treated as filed under § 6501(b)
(2). Finally, § 6432(g) provides that the
Secretary shall issue such regulations, or
other guidance, forms, instructions, and
publications, as may be necessary or appropriate to carry out § 6432, including
“allowing the credit to third-party payers
(including professional employer organizations, certified professional employer
organizations, or agents under § 3504).”
Under § 6432(e), the gross income of
any person allowed the premium assistance credit is increased, for the taxable
year which includes the last day of any
calendar quarter with respect to which the
credit is allowed, by the amount of the
credit. In addition, no credit is allowed
with respect to any amount which is taken into account as qualified wages under
§ 2301 of the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act),
Pub. L. 116-136, 134 Stat. 281 (March
27, 2020), as amended by the Taxpayer
Certainty and Disaster Tax Relief Act of
2020 (Relief Act), which was enacted as
Division EE of the Consolidated Appropriations Act, 2021, Pub. L. 116-260, 134
Stat. 1182 (December 27, 2020), § 3134 of
the Code, or as qualified health plan expenses under §§ 7001(d) or 7003(d) of the
Families First Coronavirus Response Act
(FFCRA), Pub. L. 116-127, 134 Stat. 178
(March 18, 2020), as amended by § 286
of the Relief Act, or §§ 3131 or 3132 of
the Code.
Finally, the amount of any COBRA
premium assistance is excluded from
an individual’s gross income under new
§ 139I of the Code.

Bulletin No. 2021–23

Emergency Relief Notices

QUESTIONS AND ANSWERS

In response to the COVID-19 National Emergency,6 the Departments of Labor
and the Treasury (the Departments) issued
the Extension of Certain Timeframes for
Employee Benefit Plans, Participants, and
Beneficiaries Affected by the COVID-19
Outbreak (Joint Notice) (85 FR 26351,
published May 4, 2020), which provides
extensions of certain timeframes for group
health plans and their participants and
beneficiaries. The Joint Notice provides
that plans must disregard certain periods
beginning March 1, 2020 until 60 days
after the announced end of the National
Emergency or such other date announced
by the Departments (Outbreak Period) in
determining the time by which certain actions must be taken or are permitted to be
completed.
Section 7508A(b) of the Code and
§ 518 of ERISA limit the Departments’
authority to disregard time periods to one
year. As the one-year anniversary of the
Joint Notice approached, the Department
of Labor, with the concurrence of the
Treasury Department, issued EBSA Disaster Relief Notice 2021-01 (February
26, 2021). EBSA Disaster Relief Notice
2021-01 clarifies that disregarded periods under the Joint Notice run until the
earlier of (1) one year from the date the
applicable person was first eligible for
relief, or (2) 60 days after the announced
end of the National Emergency. The Joint
Notice and EBSA Disaster Relief Notice
2021-01 are referred to collectively in
this notice as the “Emergency Relief Notices.”
The periods and dates subject to the
Emergency Relief Notices include, among
others: (1) the 60-day election period for
COBRA continuation coverage under
§ 4980B(f)(5); (2) the date for making
COBRA premium payments pursuant to
§ 4980B(f)(2)(B)(iii) and (C); and (3) the
date for plans to provide a COBRA election notice under § 4980B(f)(6)(D).

The following questions and answers
address many issues that have arisen
with respect to COBRA premium assistance available for COBRA continuation
coverage under the ARP. Generally, the
questions and answers apply for purposes of all COBRA continuation coverage
requirements under the ARP, that is, both
Federal COBRA and comparable State
mini-COBRA requirements. If a question or answer or a particular part of an
answer is applicable only to Federal COBRA, that discussion refers specifically
to Federal COBRA. COBRA premium
assistance requirements apply to the employer or plan sponsor, group health plan,
or issuer, depending on the facts and circumstances. For simplicity, in this notice,
references in the questions and answers to
an “employer” are considered references
to the employer, plan, plan sponsor, group
health plan, or issuer, as applicable to a
particular situation, whereas references to
“common law employer” are references to
the entity that is the employer under the
common law of the Assistance Eligible Individual receiving the COBRA premium
assistance.
ELIGIBILITY FOR COBRA
PREMIUM ASSISTANCE
Q-1. Who qualifies as an Assistance Eligible Individual?
A-1. An Assistance Eligible Individual is any individual who is (1) a qualified
beneficiary as the result of (A) the reduction of hours of a covered employee’s
employment or (B) the involuntary termination of a covered employee’s employment (other than by reason of an employee’s gross misconduct), (2) is eligible for
COBRA continuation coverage for some
or all of the period beginning on April 1,
2021, through September 30, 2021, and
(3) elects the COBRA continuation coverage. This includes qualified beneficiaries

who are the spouse or dependent child of
the employee who had the reduction in
hours or involuntary termination of employment resulting in a loss of coverage,
as well as the employee, if that reduction
in hours or involuntary termination of employment caused the qualified beneficiary
to lose coverage and the other requirements are satisfied.
Q-2. Who qualifies as a qualified beneficiary for purposes of becoming an Assistance Eligible Individual?
A-2. In order to be a qualified beneficiary who is eligible to become an Assistance
Eligible Individual, an individual must (1)
be covered under the group health plan
on the day before the reduction in hours
or involuntary termination of the covered
employee’s employment, and (2) lose eligibility for the coverage due to the reduction in hours or involuntary termination of
the covered employee’s employment.7An
individual who loses group health coverage in connection with the termination of
a covered employee’s employment by reason of the employee’s gross misconduct is
not a qualified beneficiary and, thus, cannot be an Assistance Eligible Individual.
Q-3. Can an individual become an
Assistance Eligible Individual more than
once?
A-3. Yes. An individual who becomes
a qualified beneficiary as the result of a
reduction in hours or involuntary termination of employment, and who otherwise
meets the requirements to be an Assistance Eligible Individual, is treated as an
Assistance Eligible Individual regardless
of whether the individual was also treated
as an Assistance Eligible Individual at an
earlier date.
Example: On April 1, 2021, the individual’s
employment is terminated, and the individual becomes a qualified beneficiary. The individual elects
COBRA continuation coverage and becomes an
Assistance Eligible Individual with COBRA continuation coverage beginning on April 1, the date
the individual lost coverage. On July 1, 2021, the
individual becomes eligible for coverage under a
group health plan sponsored by the employer of the
individual’s spouse and ceases to be an Assistance

On March 13, 2020, the President issued the Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak declaring a national emergency, beginning March 1, 2020, under §§ 201 and 301 of the National Emergencies Act (50 U.S.C. 1601 et seq.). By separate letter, also on March 13, 2020, the President declared under
§ 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. § 5121 et seq., that an emergency existed nationwide, as the result of the COVID-19 outbreak (the
COVID-19 National Emergency or National Emergency). See 85 FR 26351, 26352 (May 4, 2020).
7
There are exceptions to this rule in the case of a child born to or adopted by a covered employee during a period of COBRA continuation coverage or in certain circumstances where coverage
was wrongfully denied to the individual (see § 54.4980B-3, Q&A-1).
6

Bulletin No. 2021–23

1175

June 7, 2021

Eligible Individual. The individual ceases COBRA
continuation coverage as of July 1, 2021, and enrolls
in coverage in the group health plan sponsored by
the employer of the individual’s spouse. On August
1, 2021, the individual’s spouse has an involuntary
termination of employment and as a result the individual and spouse lose coverage. The individual and
spouse become qualified beneficiaries due to the loss
of coverage and elect COBRA continuation coverage
with the plan sponsored by the spouse’s employer.
The individual and spouse become Assistance Eligible Individuals with respect to COBRA continuation
coverage as of August 1, 2021.

Q-4. May the employer require individuals to self-certify or attest that they
are eligible for COBRA continuation coverage with COBRA premium assistance
due to a reduction in hours or involuntary
termination of employment and, if so,
may the self-certification or attestation be
used to assist the employer in substantiating its entitlement to the premium assistance credit?
A-4. Yes. Employers may require individuals to provide a self-certification
or attestation regarding their eligibility
status with respect to a reduction in hours
or involuntary termination of employment, which may assist the employer in
substantiating its entitlement to the credit. Employers are not required to obtain
a self-certification or attestation; however, employers who claim the credit must
retain in their records either a self-certification or attestation from the individual
regarding the individual’s eligibility status, or other documentation to substantiate that the individual was eligible for the
COBRA premium assistance (see Q&A-7;
see also Q&A-84).
Q-5. May the employer require individuals to self-certify or attest as to their
eligibility status regarding other disqualifying group health plan coverage or Medicare, and if so, may the self-certification
or attestation be used to assist the employer in substantiating its entitlement to the
premium assistance credit?
A-5. Yes. Employers may require individuals to provide a self-certification or
attestation as to their eligibility status for
other disqualifying group health plan coverage or Medicare, which may assist the
employer in substantiating its entitlement
to the premium assistance credit. Employers are not required to obtain a self-certification or attestation; however, employers who claim the credit must retain in
their records either a self-certification or

June 7, 2021

attestation from the individual regarding
the individual’s eligibility status, or other documentation to substantiate that the
individual was eligible for the COBRA
premium assistance (see Q&A-7; see also
Q&A-84).
Q-6. May an employer rely on an individual’s attestation regarding a reduction
in hours or involuntary termination of employment, or regarding eligibility for other disqualifying coverage, for the purpose
of substantiating eligibility for the premium assistance credit?
A-6. Yes. An employer may rely on an
individual’s attestation regarding a reduction in hours or involuntary termination
of employment, and eligibility for other
disqualifying coverage, for the purpose
of substantiating eligibility for the credit,
unless the employer has actual knowledge
that the individual’s attestation is incorrect.
Q-7. Must an employer keep a record
of an individual’s attestation?
A-7. Yes. If the employer is relying
on an individual’s attestation regarding a
reduction in hours or involuntary termination of employment, or regarding eligibility for other disqualifying coverage,
the employer must keep a record of the
attestation in order to substantiate eligibility for the premium assistance credit.
An employer may rely on other evidence
to substantiate eligibility, such as records
concerning a reduction in hours or involuntary termination of employment.
Q-8. Does a qualifying event other than
a reduction in hours or an involuntary termination of employment qualify an individual for COBRA premium assistance?
A-8. No. Qualifying events other than
a reduction in hours or an involuntary termination of employment, such as divorce
or a covered dependent child ceasing to
be a dependent child under the generally
applicable terms of the plan (such as loss
of dependent status due to aging out of eligibility), are not events qualifying an individual for COBRA premium assistance.
Q-9. If a potential Assistance Eligible
Individual was eligible for other group
health plan coverage before April 1,
2021, but on and after April 1, 2021, has
not been permitted to enroll in that other
group health plan coverage, is COBRA
premium assistance available for the individual’s COBRA continuation coverage?

1176

A-9. Yes. COBRA premium assistance
is available to a potential Assistance Eligible Individual until the individual is
permitted to enroll in coverage under any
other group health plan (including during
a waiting period for any other plan).

Example 1: An individual’s employment was involuntarily terminated and as a result the individual
lost health coverage on October 1, 2020. On November 1, 2020, the individual was eligible to enroll in
the group health plan provided by the employer of
the individual’s spouse as part of that group health
plan’s annual open enrollment period, but the individual did not enroll. The open enrollment period for
the spouse’s group health plan ended December 1,
2020, and the individual has not been permitted to
enroll in coverage under the spouse’s group health
plan at any time on or after April 1, 2021. Under
these facts, the individual is not considered eligible
for coverage under the plan of the spouse’s employer until the first available enrollment period, if any,
that begins on or after April 1, 2021. Therefore, the
individual may elect COBRA continuation coverage
under the plan of the individual’s former employer
during the ARP extended election period and may receive COBRA premium assistance as an Assistance
Eligible Individual under the plan of the individual’s former employer, beginning on or after April 1,
2021.
Example 2: Same facts as Example 1, except that
the spouse’s group health plan has an open enrollment period from June 1, 2021, to June 14, 2021,
with coverage elected during the open enrollment
period beginning July 1, 2021. The spouse does not
elect coverage for the individual under the plan of
the spouse’s employer, and the individual continues
COBRA continuation coverage under the plan of
the individual’s former employer. Under these facts,
COBRA premium assistance is not available for the
individual’s COBRA continuation coverage under
the plan of the individual’s former employer for periods of coverage beginning on or after July 1, 2021
(the date on which the individual was first eligible to
enroll in the group health plan of the spouse’s employer).
Example 3: An individual’s employment was involuntarily terminated and as a result the individual
lost health coverage on October 1, 2020. The individual received a COBRA notice on October 1, 2020.
The individual qualified for a special enrollment
period for loss of coverage under the group health
plan of the spouse’s employer. Under the Emergency Relief Notices, the individual remains eligible to
elect COBRA continuation coverage or enroll in the
spouse’s plan. Additionally, on November 1, 2020,
the individual was eligible to enroll in the spouse’s
plan under that plan’s annual open enrollment period. The open enrollment period for the spouse’s
plan ended December 1, 2020. However, the individual remains eligible to enroll in coverage under
the spouse’s plan under the loss of coverage special
enrollment period due to the Emergency Relief Notices. Under these facts, the individual is considered
eligible for coverage under the plan of the spouse’s
employer due to the special enrollment period for
loss of coverage as extended by the Emergency Relief Notices. Therefore, while the individual could

Bulletin No. 2021–23

elect COBRA continuation coverage from the former
employer’s plan, the individual may not receive COBRA premium assistance as an Assistance Eligible
Individual under the plan of the individual’s former
employer.

Q-10. If a potential Assistance Eligible
Individual does not elect COBRA continuation coverage and enrolls in coverage
under another group health plan, but has
ceased to be covered by the other group
health plan as of April 1, 2021, is COBRA
premium assistance available if the individual elects COBRA continuation coverage under the ARP extended election
period?
A-10. Yes. Enrollment in other group
health plan coverage before electing COBRA continuation coverage does not end
the period of eligibility for COBRA continuation coverage. If the individual is no
longer covered by (or eligible to enroll in)
the other group health plan coverage as
of April 1, 2021, that prior coverage by a
group health plan does not disqualify the
individual from COBRA premium assistance. However, beginning on April 1,
2021, coverage by (or eligibility to enroll
in) another group health plan would disqualify the individual from COBRA premium assistance, even though it does not
end the period of eligibility for COBRA
continuation coverage.
Q-11. If an Assistance Eligible Individual is eligible for other disqualifying
group health plan coverage or Medicare
beginning on or after April 1, 2021, but
does not enroll in either, is COBRA premium assistance available for the individual’s COBRA continuation coverage for
periods of coverage beginning on or after
the date the individual is first eligible for
the other coverage?
A-11. No. (However, if the other coverage for which the individual is eligible
is COBRA continuation coverage, that
coverage will not cause the individual to
be ineligible for the COBRA premium assistance.)
Example 1: An Assistance Eligible Individual
enrolled in COBRA continuation coverage begins
employment with a new employer and is eligible
to enroll in the employer’s group health plan, with
coverage effective the first day of the next month.
The Assistance Eligible Individual declines the coverage and continues COBRA continuation coverage.
Although eligibility for other group health coverage
does not end the individual’s eligibility for Federal
COBRA continuation coverage, eligibility for COBRA premium assistance ends as of the first day of
the next month.

Bulletin No. 2021–23

Example 2: Same facts as Example 1, except
that the new employer’s group health plan imposes
a 2-month waiting period, with coverage starting as
of the first day of the month immediately following
the end of the waiting period. The individual’s eligibility for COBRA premium assistance ends as of
the first day of the month immediately following the
end of the waiting period, even though the individual
declined coverage under the new employer’s group
health plan. The result is the same if the individual
enrolls in the new employer’s group health plan; the
individual is not eligible for COBRA premium assistance as of the first day of the month immediately
following the end of the waiting period.
Example 3: Two Assistance Eligible Individuals
who are spouses are enrolled in COBRA continuation coverage. One spouse begins employment with
a new employer and is eligible to enroll in the employer’s group health plan with self-only or family
coverage, with coverage effective the first day of the
next month. That spouse enrolls in self-only coverage, and the other spouse continues COBRA continuation coverage. Although the individual is allowed
to continue Federal COBRA continuation coverage,
the individual is no longer eligible for COBRA premium assistance as of the first day of the next month
because the individual is eligible for coverage under
the group health plan of the spouse’s employer.

Q-12. Is an individual currently enrolled in Medicare who is a qualified
beneficiary as the result of a reduction in
hours or involuntary termination of employment able to elect COBRA continuation coverage and receive COBRA premium assistance?
A-12. No. An individual currently enrolled in Medicare who becomes a qualified beneficiary as the result of a reduction
in hours or involuntary termination of employment may be eligible to elect COBRA
continuation coverage but is not eligible
for COBRA premium assistance.
Q-13. Is an individual who is a qualified beneficiary as the result of a reduction in hours or involuntary termination of
employment but who is currently enrolled
in individual health insurance coverage
through a Health Insurance Exchange eligible to elect COBRA continuation coverage and receive COBRA premium assistance?
A-13. Yes. An individual who is a qualified beneficiary as the result of a reduction in hours or involuntary termination of
employment but who is currently enrolled
in individual health insurance coverage
through a Health Insurance Exchange may
be eligible to elect COBRA continuation
coverage and for COBRA premium assistance. However, an individual is not eligible for a premium tax credit to help pay
for the cost of Exchange coverage during

1177

any month that the individual is enrolled
in COBRA continuation coverage. An individual who elects COBRA continuation
coverage (with or without COBRA premium assistance) and who is enrolled in
coverage through a Health Insurance Exchange with advance payments of the premium tax credit (APTC) may be required
to repay the APTC for the overlap months.
See Q&A-44 for information regarding
the waiver of COBRA continuation coverage, which may assist individuals in this
situation.
Q-14. Does a reduction in hours or involuntary termination of employment that
follows an earlier qualifying event, such
as a divorce, make the qualified beneficiary from the first qualifying event a potential Assistance Eligible Individual?
A-14. No. If COBRA continuation
coverage is based on a qualifying event
other than a reduction in hours or involuntary termination of employment, the later
reduction in hours or involuntary termination of employment of the employee does
not cause a loss of coverage, and the qualified beneficiary therefore does not become
a potential Assistance Eligible Individual.
Example: An employee is divorced and the divorce results in a loss of health coverage for the
spouse of the employee (but not the employee) on
November 1, 2020. The spouse is eligible for and
timely elects COBRA continuation coverage. On
December 1, 2020, the employee’s employment is
involuntarily terminated and, as a result, the employee loses health coverage. The employee elects
COBRA continuation coverage that begins December 1, 2020. The spouse is not an Assistance Eligible
Individual because the qualifying event with respect
to the spouse’s COBRA continuation coverage is
the divorce, rather than the employee’s involuntary
termination of employment. Moreover, the employee’s involuntary termination of employment is not a
qualifying event for the spouse. The employee is an
Assistance Eligible Individual, however, because the
qualifying event with respect to the employee is the
involuntary termination of employment.

Q-15. If, as the result of an involuntary
termination of employment, an individual
loses coverage under a health plan that is
not subject to COBRA continuation coverage requirements (as defined under the
ARP) and the individual is then offered
and elects continuation coverage provided
voluntarily by the employer, is COBRA
premium assistance available with respect
to that continuation coverage?
A-15. No. In order for COBRA premium assistance and the related premium assistance credit to be available, the

June 7, 2021

plan must be subject to COBRA continuation coverage requirements as defined
under the ARP. Examples of health plans
that may not be subject to either Federal
COBRA or State mini-COBRA include
a self-insured church plan or a small employer plan. (Treas. Reg. § 54.4980B-2,
Q&A-5 provides that a small-employer
plan excluded from Federal COBRA is a
group health plan maintained by an employer that normally employed fewer than
20 employees during the preceding calendar year.)
Q-16. Is COBRA premium assistance
available with respect to temporary continuation coverage elected under the Federal Employees Health Benefits (FEHB)
program pursuant to 5 U.S. Code § 8905a
by an individual who lost coverage due to
a reduction in hours or an involuntary termination of employment?
A-16. No. Continuation coverage
elected under the FEHB program pursuant to 5 U.S. Code § 8905a is not COBRA
continuation coverage for purposes of
§ 9501 of the ARP and so COBRA premium assistance is not available with respect
to that coverage.
Q-17. Is COBRA premium assistance
available to individuals who have elected
and remained on COBRA continuation
coverage for an extended period due to
a disability determination, second qualifying event, or an extension under State
mini-COBRA, to the extent those additional periods of coverage fall between
April 1, 2021, and September 30, 2021, if
the original qualifying event was a reduction in hours or an involuntary termination
of employment?
A-17. Yes. If the original qualifying
event was a reduction in hours or an involuntary termination of employment,
COBRA premium assistance is available
to individuals who have elected and remained on COBRA continuation coverage
for an extended period due to a disability
determination, second qualifying event, or
an extension under State mini-COBRA, to
the extent the additional periods of coverage fall between April 1, 2021, and September 30, 2021.
Q-18. If retiree health coverage (that
is not COBRA continuation coverage) is
offered to a potential Assistance Eligible
Individual, how does that offer affect eligibility for COBRA premium assistance?

June 7, 2021

A-18. The effect on eligibility for
COBRA premium assistance depends on
whether the retiree health coverage is offered under the same group health plan
as the COBRA continuation coverage or
under a separate group health plan. If offered under the same group health plan,
the offer of the retiree health coverage has
no effect on a potential Assistance Eligible
Individual’s eligibility for COBRA premium assistance under the ARP. However,
a potential Assistance Eligible Individual
is not eligible for COBRA premium assistance if the individual is offered retiree
health coverage that is not COBRA continuation coverage and is coverage under
a separate group health plan than the plan
under which the COBRA continuation
coverage is offered.
The COBRA regulations provide rules
for determining whether health benefits
provided by an employer or employee organization constitute one or more
group health plans for purposes of Federal
COBRA. See Treas. Reg. § 54.4980B2, Q&A-6. Under those rules, all health
benefits provided by an organization
constitute a single group health plan unless it is clear from the instruments governing the arrangement or arrangements
that the benefits are being provided under
separate plans, and the arrangement or arrangements are operated pursuant to such
instruments as separate plans. (See Q&A36 for more information regarding retiree
health coverage.)
Q-19. Does COBRA premium assistance apply to portions of the premium
attributable to COBRA continuation coverage for individuals who are not qualified
beneficiaries?
A-19. No. COBRA premium assistance is limited to premiums attributable
to COBRA continuation coverage for Assistance Eligible Individuals. For purposes of Federal COBRA, a qualified beneficiary with respect to a covered employee
under a group health plan is the spouse of
the employee or a dependent child of the
employee if the spouse or dependent child
was a beneficiary under the plan on the
day before the qualifying event. A child
who is born to or adopted by the covered
employee during the period of COBRA
continuation coverage may also be a qualified beneficiary. Otherwise, a spouse or
dependent child who was not a benefi-

1178

ciary under the plan before the qualifying
event is not a qualified beneficiary. In addition, if an individual does not meet the
definition of a qualified beneficiary under
Federal COBRA, the individual’s coverage is not eligible for COBRA premium
assistance, even though the individual
may continue to be covered or be eligible
to continue coverage under a plan by its
terms, or as required by State law. (If there
are additional individuals enrolled in COBRA continuation coverage who are ineligible for COBRA premium assistance, see
Q&A-68 for information regarding calculation of the premium assistance credit.)
Q-20. If an individual makes or owes
COBRA premium payments for retroactive COBRA continuation coverage elected under the Emergency Relief Notices
for which the payment due date has been
extended, does that make the individual
ineligible for premium assistance?
A-20. No. If an individual elected retroactive COBRA continuation coverage
under the Emergency Relief Notices, neither making nor owing COBRA premium
payments for retroactive COBRA continuation coverage for which the payment due
date has been extended makes an individual ineligible for COBRA premium assistance. However, an individual may lose
retroactive COBRA continuation coverage (as noted in Q&A-58) for the months
for which the premium is not timely paid
under the Emergency Relief Notices. Any
late or unpaid premiums for retroactive
COBRA continuation coverage will not
affect an individual’s eligibility for COBRA premium assistance.
REDUCTION IN HOURS
Q&A-21 through Q&A-23 apply solely
for purposes of determining whether there
is a reduction in hours under § 9501 of the
ARP and § 6432 of the Code, and other
provisions of the Code added or amended
by § 9501 of the ARP, but not for any other purposes of the Code or any other law.
Q-21. May a qualified beneficiary
whose qualifying event is a voluntary reduction in hours be a potential Assistance
Eligible Individual who qualifies for COBRA premium assistance?
A-21. Yes. An employee’s reduction in
hours would cause the qualified beneficiary to be a potential Assistance Eligible In-

Bulletin No. 2021–23

dividual regardless of whether the reduction in hours is voluntary or involuntary.
Q-22. Is a qualified beneficiary whose
qualifying event is a furlough a potential
Assistance Eligible Individual who qualifies for COBRA premium assistance?
A-22. Yes. In this notice, the term “furlough” means a temporary loss of employment or complete reduction in hours
with a reasonable expectation of return to
employment or resumption of hours (for
example, due to an expected business recovery of the employer) such that the employer and employee intend to maintain
the employment relationship. A furlough
may be a reduction in hours regardless of
whether the employer initiated the furlough, or the individual participated in a
furlough process analogous to a window
program (see Q&A-29).
Q-23. Does a reduction in hours include a work stoppage as the result of a
lawful strike initiated by employees or
their representatives or a lockout initiated
by the employer?
A-23. Yes. A reduction in hours includes a work stoppage, either as the result of a lawful strike initiated by employees or their representatives or a lockout
initiated by the employer, as long as at
the time the work stoppage or the lawful
strike commences the employer and employee intend to maintain the employment
relationship.
INVOLUNTARY TERMINATION OF
EMPLOYMENT
Q&A-24 through Q&A-34 apply solely
for purposes of determining whether there
is an involuntary termination of employment under § 9501 of the ARP and § 6432
of the Code, and other provisions of the
Code added or amended by § 9501 of the
ARP, but not for any other purposes under
the Code or any other law.
Q-24. What circumstances constitute
an involuntary termination of employment
for purposes of the definition of an Assistance Eligible Individual?
A-24. An involuntary termination of
employment means a severance from employment due to the independent exercise
of the unilateral authority of the employer
to terminate the employment, other than
due to the employee’s implicit or explicit
request, where the employee was willing

Bulletin No. 2021–23

and able to continue performing services.
For application of the involuntary termination of employment standard with respect
to the failure to renew an employment
agreement or similar contract, see Q&A34. In addition, an employee-initiated termination of employment constitutes an involuntary termination of employment for
purposes of COBRA premium assistance
if the termination of employment constitutes a termination for good reason due to
employer action that results in a material
negative change in the employment relationship for the employee analogous to a
constructive discharge.
The determination of whether a termination is involuntary is based on the facts
and circumstances. For example, if a termination is designated as voluntary or as a
resignation, but the facts and circumstances indicate that the employee was willing
and able to continue performing services,
so that, absent the voluntary termination,
the employer would have terminated the
employee’s services, and that the employee had knowledge that the employee
would be terminated, the termination is
involuntary.
Q-25. Does involuntary termination of
employment include an employer’s action
to end an individual’s employment while
the individual is absent from work due to
illness or disability, if that action would
otherwise constitute an involuntary termination of employment?
A-25. Yes. Involuntary termination of
employment occurs when the employer
takes action to terminate the individual’s
employment, if before the action there is a
reasonable expectation that the employee
will return to work after the illness or disability has subsided. However, mere absence from work due to illness or disability before the employer has taken action
to end the individual’s employment is not
an involuntary termination of employment
(see Q&A-32). Whether the absence from
work is a reduction in hours potentially
resulting in COBRA continuation coverage depends on whether the absence from
work results in a loss of coverage.
Q-26. Does an involuntary termination
of employment include retirement?
A-26. Generally, no. In general, a retirement is a voluntary termination of
employment. However, if the facts and
circumstances indicate that, absent retire-

1179

ment, the employer would have terminated the employee’s employment, that the
employee was willing and able to continue employment, and that the employee
had knowledge that the employee would
be terminated absent the retirement, the
retirement is an involuntary termination
of employment.
Q-27. Does involuntary termination of
employment include involuntary termination of employment for cause?
A-27. Yes. However, if the termination
of employment is due to gross misconduct
of the employee, the termination is not a
qualifying event and the loss of the health
coverage of the employee and other family members by reason of the employee’s
termination of employment does not lead
to eligibility for COBRA continuation
coverage. Therefore, the loss of coverage
due to a termination of employment for
gross misconduct will not result in an individual becoming a potential Assistance
Eligible Individual.
Q-28. Does an involuntary termination
of employment include a resignation as
the result of a material change in the geographic location of employment for the
employee?
A-28. Yes.
Q-29. Does an involuntary termination
of employment include participation by
an employee in a window program under
which employees with impending terminations of employment are offered a severance arrangement to terminate employment within a specified period of time (the
“window”)?
A-29. Yes. An involuntary termination
of employment includes participation in a
window program that meets the requirements of Treas. Reg. § 31.3121(v)(2)-1(b)
(4)(v). See those regulations for further
information including certain time limits
applicable to the window and limits on the
ability to have successive windows.
Q-30. Does an involuntary termination
of employment occur because the termination of employment is for “good reason” if
an employee terminates employment because of concerns about workplace safety
due to a health condition of the employee
or a family member of the employee?
A-30. In general, an employee’s termination of employment due to general concerns about workplace safety is not treated
as an involuntary termination of employ-

June 7, 2021

ment. However, a termination of employment would be involuntary if the employee can demonstrate that the employer’s
actions (or inactions) resulted in a material negative change in the employment
relationship analogous to a constructive
discharge. A departure due to the personal
circumstances of the employee unrelated
to an action or inaction of the employer,
such as a health condition of the employee or a family member, inability to locate
daycare, or other similar issues, generally
will not rise to the level of being analogous to a constructive discharge absent the
employer’s failure to either take a required
action or provide a reasonable accommodation.
Q-31. Is an individual whose qualifying event is an employee-initiated termination of employment because a child is
unable to attend school or because another childcare facility is closed due to the
COVID-19 National Emergency a potential Assistance Eligible Individual?
A-31. No. However, if the individual
maintains the ability to return to work, and
the facts and circumstances indicate that
the qualifying event is a temporary leave
of absence such that the employer and
employee intend to maintain the employment relationship, the qualifying event is
a voluntary reduction in hours and the individual would be a potential Assistance
Eligible Individual.
Q-32. Does an involuntary termination
of employment include a termination of
employment initiated by the employee in
response to an involuntary material reduction in hours that did not result in a loss of
coverage?
A-32. Yes. For purposes of COBRA
premium assistance, an employee-initiated termination of employment in response
to an involuntary material reduction in
hours is treated as a termination for good
reason. Thus, an employee-initiated termination of employment due to an involuntary material reduction in hours would be
an involuntary termination of employment
for purposes of COBRA premium assistance.
Q-33. Is the death of an employee an
involuntary termination of employment
that makes qualified beneficiaries such as
the spouse and dependent children of the
employee potential Assistance Eligible Individuals?

June 7, 2021

A-33. No. The death of an employee
is not a reduction in hours or an involuntary termination of employment, so a loss
of coverage due to the employee’s death
would not result in the spouse and dependent children of the employee being potential Assistance Eligible Individuals.
Q-34. Does an involuntary termination
of employment include an employer’s
decision not to renew an employee’s contract, including for an employee whose
employer is a staffing agency?
A-34. Generally, yes. An employer’s
decision not to renew an employee’s contract will be considered an involuntary termination of employment if the employee
was otherwise willing and able to continue the employment relationship and was
willing either to execute a contract with
terms similar to those of the expiring contract or to continue employment without
a contract. However, if the parties understood at the time they entered into the
expiring contract, and at all times when
services were being performed, that the
contract was for specified services over
a set term and would not be renewed, the
completion of the contract without it being renewed is not an involuntary termination of employment.
COVERAGE ELIGIBLE FOR
COBRA PREMIUM ASSISTANCE
Q-35. Is COBRA premium assistance
available for COBRA continuation coverage under a vision-only or dental-only
plan?
A-35. Yes. COBRA premium assistance is available for COBRA continuation
coverage of any group health plan, except
a health FSA under § 106(c) offered under
a § 125 cafeteria plan. Group health plans
include vision-only and dental-only plans,
regardless of whether the employer pays
for a portion of the premiums for active
employees. COBRA premium assistance
is not available for continuation coverage
offered by employers for non-health benefits that are not subject to Federal COBRA continuation coverage requirements,
such as group-term life insurance. (See
Q&A-55 regarding eligibility for COBRA
continuation coverage for distinct benefit
options).
Q-36. May retiree health coverage be
treated as COBRA continuation coverage

1180

for which COBRA premium assistance is
available?
A-36. Yes, but only if the retiree coverage is offered under the same group health
plan as the coverage made available
to similarly situated active employees,
though the amount charged for the retiree
coverage may be higher than that charged
to active employees. In that case, the retiree coverage may still be eligible for the
COBRA premium assistance as long as
the amount charged to a retiree does not
exceed the maximum amount allowed under Federal COBRA.
Q-37. Is COBRA premium assistance
available for COBRA continuation coverage under a health reimbursement arrangement (HRA)?
A-37. Yes. Note that, for purposes of the
ARP, COBRA continuation coverage does
not include a health FSA provided through
a § 125 cafeteria plan paid for with salary
reduction amounts. Even though, under
some circumstances, an HRA may qualify
as a health FSA under § 106(c)(2), such
an HRA would not be excluded from the
ARP’s definition of COBRA continuation
coverage because the HRA would be paid
for with employer contributions, not salary reduction amounts contributed through
a § 125 cafeteria plan.
Q-38. Does eligibility for coverage
under an HRA end the period of COBRA
premium assistance under the ARP in the
same way as eligibility for coverage under
any other group health plan?
A-38. Yes, unless the HRA qualifies
as a health FSA under § 106(c)(2). Under § 106(c)(2)(B), a health FSA is health
coverage under which the maximum
amount of reimbursement that is reasonably available to a participant for the
coverage is less than 500 percent of the
value of the coverage. For this purpose,
the maximum amount of reimbursement
that is reasonably available generally
would be the balance of the HRA, and
the value of the HRA coverage generally would be the applicable premium for
COBRA continuation of the HRA coverage, not taking into account COBRA premium assistance.
Q-39. Is COBRA premium assistance
available for COBRA continuation coverage under an HRA integrated with individual health insurance coverage (an individual coverage HRA)?

Bulletin No. 2021–23

A-39. Yes. In the case of an individual
coverage HRA, the COBRA continuation
coverage applies only to the individual
coverage HRA and not to the underlying
individual health insurance coverage. The
qualified beneficiary with COBRA continuation coverage must still incur and substantiate covered medical care expenses
(which may include health insurance premiums) to be reimbursed by the individual coverage HRA. Although an individual
coverage HRA may include an HRA integrated with Medicare, a qualified beneficiary eligible for Medicare cannot be
an Assistance Eligible Individual; thus,
COBRA premium assistance is not available if the COBRA continuation coverage
is under an individual coverage HRA integrated with Medicare. (See Q&A-70
regarding the calculation of the premium
assistance credit in the case of an individual coverage HRA.)
Q-40. Is COBRA premium assistance
available for coverage under a QSEHRA
as defined in § 9831(d)?
A-40. No. A QSEHRA is not a group
health plan eligible for COBRA continuation coverage.
Q-41. Pursuant to § 9501(a)(1)(B) of
the ARP, a plan sponsor allows an Assistance Eligible Individual to enroll in
coverage under a plan that is different
than the coverage the individual was
enrolled in at the time of the qualifying
event. Does the requirement that the premium for the different coverage elected
not exceed the premium for coverage that
the individual was enrolled in at the time
of the qualifying event simply limit the
amount of the COBRA premium assistance, thereby allowing the individual to
elect a plan with a higher premium but restricting the amount of COBRA premium
assistance to the amount of the premium
for the coverage that the individual was
enrolled in at the time of the qualifying
event (with the individual or employer
paying the excess over the COBRA premium assistance)?
A-41. No. Unless otherwise allowed
under the COBRA regulations or other
applicable law, coverage with a premium
greater than the premium for the coverage
that the individual was enrolled in at the
time of the qualifying event is not eligible for the COBRA premium assistance.
However, the requirements in § 9501(a)

Bulletin No. 2021–23

(1)(B) of ARP do not apply to a situation
in which the plan in which the individual
was enrolled at the time of the qualifying
event is not available (see Q&A-42).

Example: An individual is an Assistance Eligible Individual who was enrolled in a plan with an
$800 per month COBRA premium at the time of the
qualifying event. The employer sponsoring the plan
permits Assistance Eligible Individuals to enroll in
other coverage pursuant to § 9501(a)(1)(B) of the
ARP. Three other coverages are offered to active employees similarly situated to the individual, none of
which are excepted benefits, a QSEHRA or a health
FSA. The COBRA premiums for the other coverages
are $700, $750 or $1,000 per month. The individual
may enroll in the $700 or $750 per month options
with COBRA premium assistance. If the employer
allows, the individual may enroll in the $1,000 per
month coverage option but that coverage will not be
eligible for the COBRA premium assistance. (But
see Q&A-69 regarding the availability of COBRA
premium assistance for an Assistance Eligible Individual electing a different benefit package in compliance with § 54.4980B-8, Q&A-2(c), such as during
open enrollment.)

Q-42. If a potential Assistance Eligible Individual elects COBRA continuation coverage during the ARP extended
election period but the employer no longer offers the health plan that previously
covered the individual, must the employer
place that individual in the plan most similar to the prior plan, provided the employer offers other health plans?
A-42. Yes. If an employer no longer
offers the health plan that previously covered the potential Assistance Eligible Individual, the individual must be offered the
opportunity to elect the plan that a similarly situated active employee would have
been offered that is most similar to the
previous plan that covered the individual,
even if the premium for the plan is greater
than the premium for the previous plan.
In this case, the other coverage elected by
the individual is eligible for the COBRA
premium assistance, regardless of the premium for that coverage.
BEGINNING OF COBRA PREMIUM
ASSISTANCE PERIOD
Q-43. When is an Assistance Eligible
Individual first entitled to receive COBRA
premium assistance?
A-43. An Assistance Eligible Individual is entitled to receive COBRA premium
assistance as of the first applicable period
of coverage beginning on or after April 1,
2021. For this purpose, a period of cov-

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erage is a monthly or shorter period with
respect to which premiums are normally
charged by the plan or issuer with respect
to such coverage provided to employees
and qualified beneficiaries. The start date
of the first period of coverage beginning
on or after April 1, 2021, depends on the
period with respect to which premiums
would have been normally charged by the
plan if the individual had paid the premium.
Example: Plan provides that employees and qualified beneficiaries pay premiums for health coverage,
including COBRA continuation coverage, on a biweekly basis for a corresponding two-week period
of coverage. For March 2021, the last two-week period of coverage is from March 28 through April 10,
2021, followed by a period of coverage from April
11 through April 24, 2021. COBRA premium assistance could apply with respect to the premium for the
period of coverage beginning April 11, 2021.

Q-44. Must an Assistance Eligible Individual electing COBRA continuation
coverage under the ARP extended election
period begin coverage as of the first period
of coverage beginning on or after April 1,
2021?
A-44. No. While a group health plan
must make COBRA continuation coverage with COBRA premium assistance
available as of the first period of coverage
beginning on or after April 1, 2021, in the
case of an Assistance Eligible Individual
electing COBRA continuation coverage
under the ARP extended election period,
the Assistance Eligible Individual may
waive COBRA continuation coverage for
any period before electing to receive COBRA premium assistance, including retroactive periods of coverage beginning prior
to April 1, 2021.
Example: An individual’s employment was involuntarily terminated and as a result the individual
lost health coverage on October 1, 2020. The individual received the COBRA election notice on October 1, 2020. The individual enrolls in an individual
health insurance policy on the Health Insurance Exchange, effective on November 1, 2020. The individual receives the notice of the ARP extended election
period on May 1, 2021. At that time, the individual is
not eligible to enroll in any other group health plan
or Medicare. The individual may elect COBRA continuation coverage either retroactively to October 1,
2020, retroactively to April 1, 2021, or prospectively. The individual elects COBRA continuation coverage prospectively from June 1, 2021, and contacts
the Health Insurance Exchange to end the Exchange
health insurance policy as of May 31, 2021. The individual is an Assistance Eligible Individual as of
June 1, 2021. Because there is no overlapping coverage, the individual is not required to repay any APTC
when the individual files his or her 2021 tax return.

June 7, 2021

Q-45. If an employer is no longer subject to Federal COBRA due to a reduction
in the number of employees, is the employer still required to provide the ARP
extended election period to individuals
who had a qualifying event that was a
reduction in hours or involuntary termination of employment while the employer was subject to COBRA, and are those
qualified beneficiaries potential Assistance Eligible Individuals?
A-45. Yes. Whether a qualified beneficiary is eligible to elect Federal COBRA
continuation coverage is determined by
the employer’s status at the time of the
qualifying event, and whether a qualified
beneficiary is a potential Assistance Eligible Individual who may elect COBRA
continuation coverage during the ARP
extended election period is determined by
whether the qualified beneficiary was eligible to elect COBRA continuation coverage at the time of the qualifying event.
Example: Based on the number of employees
from the preceding calendar year, an employer is not
a small employer for the 2020 calendar year, but is a
small employer for calendar year 2021. As a result,
Federal COBRA requirements apply to the employer
for calendar year 2020 but not calendar year 2021.
An individual has a qualifying event that is an involuntary termination of employment in November of
2020. Because the qualified beneficiary’s qualifying
event occurred during the 2020 calendar year when
the employer was not a small employer and the plan
was subject to Federal COBRA requirements, the
employer is required to provide the ARP extended
election period and the qualified beneficiary is eligible to elect Federal COBRA continuation coverage
with COBRA premium assistance.

Q-46. Is COBRA premium assistance
available for periods of coverage from
April 1, 2021, through September 30,
2021, if the election for COBRA continuation coverage is made after September
30, 2021?
A-46. Yes, but only if the individual
makes the election within the applicable
60-day election period. A qualified beneficiary who is a potential Assistance Eligible Individual has 60 days to elect COBRA continuation coverage after being
provided either the general notice under
§ 9501(a)(5)(A) of the ARP (for a qualifying event after April 1, 2021), or the notice
regarding the ARP extended election period under § 9501(a)(5)(C) (with respect to
a qualifying event before April 1, 2021).
If the individual makes the COBRA election after September 30, 2021, but within the applicable 60-day period, then the

June 7, 2021

individual is entitled to COBRA premium
assistance through the earlier of the last
period of coverage beginning on or before
September 30, 2021, or the date that COBRA continuation coverage expires. COBRA premium assistance would start with
the later of the first period of coverage beginning on or after April 1, the date of the
qualifying event, or the date the qualified
beneficiary elects to begin COBRA continuation coverage.
END OF COBRA PREMIUM
ASSISTANCE PERIOD
Q-47. For how long is COBRA premium assistance available to an Assistance
Eligible Individual?
A-47. COBRA premium assistance
applies until the earliest of (1) the first
date the Assistance Eligible Individual
becomes eligible for other group health
plan coverage (with certain exceptions)
or Medicare coverage, (2) the date the individual ceases to be eligible for COBRA
continuation coverage, or (3) the end of
the last period of coverage beginning on
or before September 30, 2021.
Example: A plan provides that employees and
qualified beneficiaries pay premiums for health coverage, including COBRA continuation coverage,
on a biweekly basis for a corresponding two-week
period of coverage. For September 2021, the last
two-week period of coverage is from September 19
through October 2, 2021. COBRA premium assistance would apply with respect to the entire period
of coverage beginning September 19, even though
the period of coverage includes coverage for October
1 and October 2, 2021.

Q-48. Once subsidized COBRA continuation coverage ends with the period of
coverage including September 30, 2021,
does coverage for a qualified beneficiary
who was an Assistance Eligible Individual
automatically continue with unsubsidized
COBRA and, if so, when is the payment
for the first subsequent period of coverage
due?
A-48. COBRA continuation coverage
automatically continues, and the payment for the first period of coverage after September 30, 2021 will be timely if
paid according to the terms of the plan or
coverage, subject to applicable COBRA
continuation coverage requirements taking into account the Emergency Relief
Notices.
Q-49. What are the consequences if an
Assistance Eligible Individual fails to pro-

1182

vide notice that the individual is no longer
eligible for COBRA premium assistance
due to eligibility for coverage under another group health plan or Medicare?
A-49. An Assistance Eligible Individual who fails to provide notice may be
subject to a Federal tax penalty of $250
for each failure to notify the employer,
plan, or issuer. If the failure to provide
notice is fraudulent, the penalty will be
the greater of $250 or 110 percent of the
COBRA premium assistance improperly
received. The penalty will not apply if the
individual’s failure to provide notice was
due to reasonable cause and not to willful
neglect. The employer, plan, or issuer who
received the premium assistance credit in
the amount of the excess COBRA premium assistance has no right to the penalty
payment.
Q-50. Does the death of an employee
who has had a reduction in hours or involuntary termination of employment end
the eligibility for COBRA premium assistance of any qualified beneficiary spouse
and dependent children?
A-50. No.
EXTENDED ELECTION PERIOD
Q&A-51 through Q&A-55 apply only
for purposes of Federal COBRA, unless
the Q&A indicates otherwise.
Q-51. If an employee had a reduction
in hours or an involuntary termination
of employment before April 1, 2021 and
elected self-only COBRA continuation
coverage, may a spouse or a dependent
child who is a qualified beneficiary in
connection with the reduction in hours or
involuntary termination of employment
elect COBRA continuation coverage and
receive COBRA premium assistance under the ARP extended election period?
A-51. Yes. A qualified beneficiary who
does not have an election of COBRA continuation coverage in effect on April 1,
2021, but who would have been an Assistance Eligible Individual if the election
were in effect, may elect COBRA continuation coverage under the ARP extended
election period. A spouse or dependent
child who is a beneficiary under a group
health plan that covers an employee on the
day before the reduction in hours or involuntary termination of employment of the
employee also would have been an Assis-

Bulletin No. 2021–23

tance Eligible Individual if the spouse or
dependent child had elected COBRA continuation coverage. Thus, a spouse or dependent child in this situation has a second
election opportunity, notwithstanding the
prior election of self-only COBRA continuation coverage by the employee.
Q-52. Is the ARP extended election period available to an individual if the continuation coverage is provided only under
State law (and not Federal COBRA)?
A-52. No. The ARP extended election
period under § 9501(a)(4)(A) applies
only to a group health plan that is subject
to Federal COBRA. It does not apply to
plans subject to continuation coverage
requirements under a State program that
provides comparable continuation coverage. However, if a State law or program
provides for a similar extended election
right and an individual otherwise satisfies the requirements to be an Assistance
Eligible Individual, COBRA premium assistance is available for any resulting period of COBRA continuation coverage for
periods of coverage from April 1, 2021,
through September 30, 2021.
Q-53. May a potential Assistance Eligible Individual whose qualifying event occurred before April 1, 2021, who still has
an open COBRA continuation coverage
election period independent of the ARP
(including an extended period for electing coverage under the Emergency Relief
Notices), elect COBRA continuation coverage under the ARP extended election
period and receive COBRA continuation
coverage with COBRA premium assistance that starts with a period of coverage
beginning only on or after April 1, 2021?
A-53. Yes. The extended election period for electing COBRA continuation
coverage is available for a potential Assistance Eligible Individual if the qualifying event occurred before April 1,
2021, and if the individual has not yet
elected COBRA continuation coverage,
including for an individual who has an
open COBRA election period as of April
1, 2021. If the individual elects retroactive COBRA continuation coverage under the original COBRA election period
available prior to the ARP extended election period under Federal COBRA, COBRA continuation coverage is retroactive
to that individual’s loss of coverage. COBRA premium assistance, however, does

Bulletin No. 2021–23

not apply to periods of coverage prior to
the first period of coverage beginning on
or after April 1, 2021.
Example: An individual is involuntarily terminated from employment on December 15, 2020 and
receives the COBRA election notice on January 4,
2021. As of April 1, 2021, the individual has not
elected COBRA continuation coverage. The individual must receive a notice of the ARP extended
election period for COBRA continuation coverage.
The individual may elect COBRA continuation
coverage under the original COBRA election period (as extended by the Emergency Relief Notices)
but will be eligible for COBRA premium assistance
only for periods of coverage beginning on or after
April 1, 2021. Alternatively, the individual may decline to elect COBRA continuation coverage under
the original COBRA election period (as extended by
the Emergency Relief Notices) and instead elect COBRA continuation coverage under the ARP extended
election period only for periods of coverage beginning on or after April 1, 2021.

Q-54. How does an election of COBRA
continuation coverage under the ARP extended election period apply in the case of
an HRA if the Assistance Eligible Individual elects COBRA continuation coverage
solely under the ARP extended election
period, and declines to elect coverage that
is retroactive to the qualifying event?
A-54. With respect to an election of
COBRA continuation coverage for an
HRA solely under the ARP extended election period, the HRA may no longer reimburse expenses incurred after the qualifying event that led to the loss of coverage
and before the first day of the first period
of coverage beginning on or after April
1,2021. Generally, qualified beneficiaries
electing COBRA continuation coverage
with respect to HRA coverage have access to the same level of reimbursements
during COBRA continuation coverage
as was available immediately before the
qualifying event. Thus, a qualified beneficiary electing COBRA continuation coverage with respect to an HRA under the ARP
extended election period will have access
to the same level of reimbursements as
the qualified beneficiary had immediately
before the qualifying event based on the
amount originally available for the HRA
plan year and reimbursements for expenses incurred before the qualifying event,
reduced by the amount of any reimbursements made after the qualifying event; for
example, reimbursements for expenses
incurred before the qualifying event that
were submitted and reimbursed after the
qualifying event.

1183

Q-55. If a qualified beneficiary due to
a reduction of hours or an involuntary termination of employment was previously
offered COBRA continuation coverage
with respect to both comprehensive health
coverage and dental-only or vision-only coverage and the qualified beneficiary
elected COBRA continuation coverage
only with respect to the dental-only or vision-only coverage, is the qualified beneficiary still a potential Assistance Eligible
Individual who must be offered the ARP
extended election with respect to the comprehensive health coverage?
A-55. Yes. A qualified beneficiary
whose qualifying event was a reduction
in hours or an involuntary termination of
employment is a potential Assistance Eligible Individual and must be offered the
ARP extended election period with respect to any health coverage the qualified
beneficiary was enrolled in prior to the
qualifying event and for which the individual does not have a COBRA election in
effect on April 1, 2021, even if the qualified beneficiary previously elected COBRA continuation coverage with respect
to other coverage in which the qualified
beneficiary was previously enrolled. If
the qualified beneficiary elects additional
COBRA continuation coverage pursuant
to the ARP extended election period, the
qualified beneficiary is an Assistance Eligible Individual with respect to all elected
COBRA continuation coverage.
EXTENSIONS UNDER THE
EMERGENCY RELIEF NOTICES
Q-56. What is the election period for
a potential Assistance Eligible Individual
to make the election for COBRA premium
assistance if the individual is also eligible
to elect COBRA continuation coverage
under the Emergency Relief Notices?
A-56. If a qualified beneficiary received a COBRA notice under § 4980B
before April 1, 2021, and also receives
the notice of the ARP extended election
period, then, within 60 days of receiving
the notice of the ARP extended election
period, the qualified beneficiary may
elect COBRA continuation coverage with
COBRA premium assistance for periods
of coverage beginning on or after April
1, 2021. If a qualified beneficiary elects
COBRA continuation coverage with CO-

June 7, 2021

BRA premium assistance, the individual
must also elect or decline COBRA continuation coverage retroactive to the loss
of coverage, if eligible, within 60 days of
receiving the notice of the ARP extended
election period. If the qualified beneficiary elects retroactive COBRA continuation coverage, the qualified beneficiary
may be required to pay COBRA premiums for periods of coverage beginning
before April 1, 2021.
Q-57. Do the extensions of timeframes
available under the Emergency Relief Notices apply to the required furnishing of
the notice of an ARP extended election period under § 9501(a)(5)(C), or to the ARP
extended election period to elect COBRA
continuation coverage with COBRA premium assistance beginning on or after
April 1, 2021, under § 9501(a)(4)?
A-57. No. The extensions of timeframes available under the Emergency
Relief Notices do not apply to either the
required furnishing of a notice of an ARP
extended election period under § 9501(a)
(5)(C) or to the ARP extended election period. The notice of the ARP extended election period under § 9501(a)(5)(C) must be
furnished by May 31, 2021 (60 days after
April 1, 2021). An individual receiving
the notice must elect COBRA continuation coverage no later than 60 days after
the notice is provided in order to receive
COBRA premium assistance.
Q-58. If a potential Assistance Eligible Individual elects retroactive COBRA
continuation coverage, how do the Emergency Relief Notices apply to payment of
the premiums for the retroactive coverage
and what are the consequences if the premiums are not timely paid?
A-58. The extensions of timeframes
under the Emergency Relief Notices remain available for premium payments for
the retroactive periods of coverage for potential Assistance Eligible Individuals and
those who have enrolled in COBRA continuation coverage with COBRA premium
assistance. If an Assistance Eligible Individual also elects retroactive coverage for
a period beginning before April 1, 2021,
the employer may require the individual
to pay the premiums for that period of
COBRA continuation coverage consistent
with the timeframes as extended under the
Emergency Relief Notices. If, by an applicable deadline, the individual fails to pay

June 7, 2021

any amount towards the total premiums
due for periods of retroactive COBRA
continuation coverage, the employer may
treat the individual as having not elected
COBRA coverage until the first period of
coverage beginning on or after April 1,
2021. If, by the applicable deadline, the
individual pays only a portion of the total
premiums due for retroactive coverage,
the plan may credit those premiums to the
earliest months of the retroactive COBRA
continuation coverage and resume providing COBRA continuation coverage as of
the first period of coverage beginning on
or after April 1, 2021.
Example: On November 1, 2020, an individual
becomes a qualified beneficiary as the result of an
involuntary termination of employment and receives
the COBRA election notice under § 4980B(f)(6)(D).
On April 30, 2021, the individual receives the notice of the ARP extended election period. On May
31, 2021, the individual elects both retroactive COBRA continuation coverage beginning on November
1, 2020, and COBRA continuation coverage with
premium assistance for the first period of coverage
beginning on or after April 1, 2021. The individual
pays premiums for only three months of retroactive
COBRA within the applicable payment deadlines.
The individual makes no other premium payments
before the applicable deadlines. The plan may treat
the individual as having retroactive COBRA continuation coverage only for November 2020, December
2020, and January 2021, and as having no retroactive COBRA coverage for February 2021 and March
2021 (because only three months of premiums were
paid). Because the individual also elected COBRA
continuation coverage with premium assistance for
the first period of coverage beginning on or after
April 1, 2021, the individual has COBRA continuation coverage with premium assistance for the first
period of coverage beginning on or after April 1,
2021 through the end of the period of coverage that
includes September 30, 2021, assuming the individual remains eligible for premium assistance throughout that period.

Q-59. May a potential Assistance Eligible Individual who elects COBRA continuation coverage with COBRA premium
assistance and who declines to elect retroactive COBRA continuation coverage
at that time later elect retroactive COBRA
continuation coverage?
A-59. No. If a potential Assistance Eligible Individual elects COBRA continuation coverage with COBRA premium
assistance but declines to elect COBRA
continuation coverage that would begin at
the time of a qualifying event that occurred
before April 1, 2021, that individual may
not, after the 60-day extended election
period for electing COBRA continuation
coverage under the ARP has ended, later

1184

elect COBRA continuation coverage that
begins at the time of the qualifying event.

Example: An individual has a qualifying event
that is an involuntary termination of employment on
March 1, 2021, and receives the COBRA election
notice the same day. The individual receives the notice of the ARP extended election period on May 31,
2021, and elects COBRA continuation coverage with
COBRA premium assistance starting April 1, 2021.
Assuming the Outbreak Period has not ended, the individual does not remain eligible after July 30, 2021
(60 days from the receipt of the individual’s notice of
the ARP extended election period), to elect COBRA
continuation coverage starting March 1, 2021, despite the extensions available under the Emergency
Relief Notices.

PAYMENTS TO INSURERS UNDER
FEDERAL COBRA
Q-60. In the case of an insured plan
subject to Federal COBRA that is not a
multiemployer plan, if the insurer and
the employer have agreed that the insurer will collect the COBRA premiums directly from the qualified beneficiaries, is
the insurer required to treat an Assistance
Eligible Individual as having paid the full
premium?
A-60. Yes. If the insurer fails to treat
the Assistance Eligible Individual as having made a payment of the full premium,
the insurer may be liable for the excise tax
under § 4980B(e)(1)(B), which applies to
each person responsible (other than in a
capacity as an employee) for administering or providing benefits under the plan
and whose act or failure to act caused (in
whole or in part) the failure, if the person assumed responsibility for the performance of the act to which the failure
relates. Notwithstanding the agreement
between the employer and the insurer, the
employer is required to pay the premium
to the insurer for the months of COBRA
premium assistance with respect to the individual.
COMPARABLE STATE
CONTINUATION COVERAGE
Q-61. Does a State continuation coverage program fail to provide comparable
coverage qualifying for COBRA premium
assistance under the ARP solely because
the maximum period of continuation coverage under the program differs from the
maximum period available under Federal
COBRA?

Bulletin No. 2021–23

A-61. No. A different period of continuation coverage under a State continuation coverage program does not by itself
mean a State program fails to provide
comparable coverage to Federal COBRA
continuation coverage under the ARP. For
example, the fact that a State continuation coverage program provides only six
months of continuation coverage (instead
of 18 months) would not by itself result in
the State program failing to provide comparable coverage. Similarly, State programs providing for different qualifying
events, different qualified beneficiaries, or
different maximum premiums generally
do not fail to provide comparable coverage solely for those reasons.
Q-62. In the case of an insured plan
subject solely to State law requiring the insurer to provide continuation coverage, is
the employer eligible to take the premium
assistance credit directly if the employer
pays the full premium to the insurer?
A-62. No. Under § 6432(b)(3), in the
case of an insured plan subject solely to
State law with respect to the requirement
to provide continuation coverage, the premium payee is the insurer providing the
coverage under the group health plan.
The Treasury Department and the IRS are
aware that this requirement may create administrative issues for certain Small Business Health Options Program (SHOP)
exchanges that aggregate premiums paid
by participating employers or where State
rules require full payment of premiums by
the employer; the Treasury Department
and the IRS are continuing to consider
this issue.
CALCULATION OF COBRA
PREMIUM ASSISTANCE CREDIT
Q-63. As a general rule, what is the
amount of the premium assistance credit
for a quarter?
A-63. If the employer does not subsidize COBRA premium costs for similarly
situated qualified beneficiaries who are not
Assistance Eligible Individuals, the credit
for a quarter is the amount equal to the
premiums not paid by Assistance Eligible
Individuals for COBRA continuation coverage due to the application of § 9501(a)
(1) of the ARP for the quarter. In this case,
the amount of the premiums not paid by
the Assistance Eligible Individuals is the

Bulletin No. 2021–23

premium amount charged for COBRA
continuation coverage to other similarly
situated covered employees and qualified
beneficiaries (for example, coverage for a
single individual, individual plus one, or
family who are not Assistance Eligible Individuals). The premium amount also includes any administrative costs otherwise
allowed (that is, generally 102 percent of
the applicable premium under § 4980B(f)
(4)) (see Q&A-64).
Q-64. What is the amount of the premium assistance credit if the employer
subsidizes the COBRA premium costs for
similarly situated covered employees and
qualified beneficiaries who are not Assistance Eligible Individuals?
A-64. The amount of the credit is the
premium that would have been charged
to an Assistance Eligible Individual in the
absence of the premium assistance, and
does not include any amount of subsidy
that the employer would have otherwise
provided. Thus, absent the premium assistance, if the premium that the employer
would have charged to an Assistance Eligible Individual is less than the maximum
COBRA premium—for example, if the
employer would have subsidized the coverage by paying all or part of the premium—the credit is equal to the amount that
the employer actually would have charged
to the Assistance Eligible Individual.
For the following examples, assume
102 percent of the applicable premium for
COBRA continuation coverage is $1,000
per month, and the premium payee is the
common law employer maintaining the
plan.
Example 1: Absent the COBRA premium assistance, the common law employer requires individuals electing COBRA continuation coverage to pay
$500 per month. The credit is $500 per month.
Example 2: The common law employer requires
active employees to pay $200 per month for health
coverage. Absent the COBRA premium assistance,
for involuntarily terminated employees, severance
benefits include continued health coverage at the
cost of $200 per month for three months after termination. After the three-month severance period,
the terminated employee must pay $1,000 per month
for the remainder of COBRA continuation coverage. The common law employer considers the loss
of coverage to occur on the last day coverage is in
effect before the severance benefits begin; that is, the
common law employer considers the three-month
severance period (during which the employer pays
$800 toward the cost of the terminated employee’s
COBRA continuation coverage) to be part of the terminated employee’s COBRA continuation period of
coverage.

1185

A potential Assistance Eligible Individual has an involuntary termination of employment as of April 1, 2021, and makes
the COBRA continuation election effective as of that date. For April, May, and
June 2021, the credit is $200 per month.
For July, August, and September 2021, the
credit is $1,000 per month.

Example 3: Same facts as Example 2, except
that the common law employer considers the loss of
health coverage and the beginning of the terminated
employee’s COBRA continuation period of coverage
to occur at the end of the three-month severance period. For the first three months after termination of
employment, the terminated employee is not eligible
for COBRA continuation coverage and is not an Assistance Eligible Individual. Instead, the employee
pays $200 for coverage that is not a premium for COBRA continuation coverage. The employee receives
severance benefits for health coverage beginning on
April 1, 2021, and then elects COBRA continuation
coverage beginning on July 1, 2021 (after the end of
the three-month severance period) and becomes an
Assistance Eligible Individual. The credit is $0 per
month for April, May, and June 2021, and $1,000 per
month for July, August, and September 2021.
Example 4: Same facts as Example 2, except that
for involuntarily terminated employees, the severance benefits include continued health coverage at
no cost for the three months after termination of employment.

Because the monthly premium (absent
the COBRA premium assistance) during
April, May, and June 2021 is zero, COBRA premium assistance is not available
and there is no credit for those months.
After the severance period, the terminated
employee is entitled to COBRA continuation coverage with COBRA premium assistance for July, August, and September
2021. The credit is $1,000 per month for
July, August, and September 2021.
Q-65. If a plan that previously charged
less than the maximum premium allowed
under the COBRA continuation provisions increases the premium for similarly
situated covered employees and qualified
beneficiaries pursuant to § 54.4980B-8,
Q&A-2(b)(1) (or similar authority under
comparable State law or other Federal
law), does the COBRA premium assistance apply to the increased premium
amount?
A-65. Yes.
Example: Under the plan, 102 percent of the applicable premium for COBRA continuation coverage
is $1,000 per month. For periods of coverage before
April 1, 2021, the plan charged $500 per month
for COBRA continuation coverage. Pursuant to
§ 54.4980B-8, Q&A-2(b)(1) and the applicable notice requirements, beginning April 1, 2021, the plan
charges $1,000 per month for COBRA continuation

June 7, 2021

coverage for all covered employees and qualified
beneficiaries. The COBRA premium assistance and
the premium assistance credit are $1,000 per Assistance Eligible Individual per month for the coverage
beginning April 1, 2021.

Q-66. If a plan that previously charged
less than the maximum premium allowed
under the COBRA continuation provisions increases the premium pursuant
to § 54.4980B-8, Q&A-2(b)(1), and the
employer provides a separate taxable payment to the Assistance Eligible Individual,
does the premium assistance credit apply
to the increased premium amount?
A-66. Yes.
Example: Under a group health plan, 102 percent
of the applicable premium for COBRA continuation
coverage is $1,000 per month. Before April 1, 2021,
the plan charged $400 per month for COBRA continuation coverage. Pursuant to § 54.4980B-8, Q&A2(b)(1), and the applicable notice requirements, the
plan charges all covered employees and qualified
beneficiaries $1,000 per month for COBRA continuation coverage for periods of coverage beginning
April 1, 2021. In addition, beginning April 1, 2021,
the employer provides a taxable severance benefit of
$600 per month to employees who are Assistance Eligible Individuals. An Assistance Eligible Individual
is entitled to COBRA continuation coverage without
payment of any premium. The credit is $1,000.

Q-67. If COBRA continuation coverage is provided under a State program that
provides comparable continuation coverage, does the premium assistance credit
apply to portions of the premium attributable to COBRA continuation coverage for
those individuals who would not be qualified beneficiaries under Federal COBRA?
A-67. No. While § 9501(a)(9)(B) of
the ARP defines the COBRA continuation coverage eligible for COBRA premium assistance to include comparable
State continuation coverage, a qualified
beneficiary is defined under § 9501(a)(9)
(E) by cross-reference to § 607(3) of ERISA. Thus, COBRA premium assistance is
limited to the premium attributable to the
coverage of the employee who was involuntarily terminated (other than by reason
of such employee’s gross misconduct) or
had a reduction in hours as a qualifying
event and that employee’s spouse or dependent children who are qualified beneficiaries under Federal COBRA, even if the
State law requires a group health plan to
provide continuation coverage to a broader group of individuals (for example, another member of the individual’s household who is not the spouse or a dependent
child).

June 7, 2021

Q-68. If COBRA continuation coverage of one or more Assistance Eligible
Individuals also covers one or more individuals who are not Assistance Eligible
Individuals, how is the premium for the
COBRA continuation coverage allocated
among the Assistance Eligible Individuals
and the other individuals in determining
the premium assistance credit?
A-68. The premium amounts for COBRA continuation coverage for one or
more individuals who are Assistance Eligible Individuals and one or more individuals who are not Assistance Eligible Individuals are allocated first to the premiums
for the Assistance Eligible Individuals,
based on the cost of COBRA continuation coverage (without COBRA premium
assistance) for only Assistance Eligible
Individuals, and then to the premiums for
the individuals who are not Assistance Eligible Individuals. Thus, if the total cost
of the coverage for all covered individuals does not exceed the premium costs for
the Assistance Eligible Individuals alone,
then the premium for the individual who
is not an Assistance Eligible Individual is
zero, and the COBRA premium assistance
is the full applicable premium amount of
the COBRA continuation coverage. If the
coverage of an individual who is not an
Assistance Eligible Individual increases
the total COBRA premium for all individuals, that incremental additional cost is
not COBRA premium assistance for purposes of the credit.
Example 1: An employee and the employee’s
two dependent children are Assistance Eligible Individuals and have COBRA continuation coverage.
COBRA continuation coverage also covers an individual who lives in the same household who is not an
Assistance Eligible Individual. The amount the plan
requires to be paid for COBRA continuation coverage for self-plus-two-or-more-dependents (which
includes the individual who is not an Assistance Eligible Individual) is $1,000 per month.

The amount the employee would pay
(absent the COBRA premium assistance)
for coverage for the employee and the two
children (the Assistance Eligible Individuals) for COBRA continuation coverage is
$1,000 per month. The additional premium amount for coverage of the individual
who is not an Assistance Eligible Individual is $0 per month. The employee is entitled to apply the COBRA premium assistance for the full $1,000 premium amount
per month. The credit is $1,000 per month.

1186

Example 2: Same facts as Example 1, except the
employee has only one dependent child, and the plan
charges $800 per month for self-plus-one-dependent
COBRA continuation coverage. The portion of the
premium attributable to coverage for the individual
and the individual’s dependent child (both Assistance Eligible Individuals) is $800 per month.

The employee is entitled to apply the
COBRA premium assistance to the $800
per month attributable to the Assistance
Eligible Individuals. The incremental
amount the employee pays for COBRA
continuation coverage for the individual
who is not an Assistance Eligible Individual is $200 per month, so the employee’s
total premium payment is $200 per month.
The credit is $800 per month.
Example 3: An employee is an Assistance Eligible Individual who has self-only coverage that would
cost $450 per month (absent the COBRA premium
assistance). During the ARP extended election period, the plan has an open enrollment period during
which it allows active employees and qualified beneficiaries to add spouses and dependents to their
health coverage. The employee adds the employee’s
spouse and dependent child, who were not covered
before the employee’s qualifying event, to the employee’s COBRA continuation coverage. Without
regard to the COBRA premium assistance, COBRA
continuation coverage for self-plus-two-or-more-dependents is $1,000 per month.

The spouse and the dependent child
are not Assistance Eligible Individuals because they were not covered by the plan
on the day before the employee’s qualifying event. The amount the employee pays
for the spouse and the dependent child is
$550 per month ($1,000 less $450). The
employee is entitled to COBRA premium
assistance with respect to $450 per month.
The credit is $450 per month.
Q-69. Does the premium assistance apply to the increased premium if the plan,
in compliance with § 54.4980B-8, Q&A2(c), allows the Assistance Eligible Individual to change coverage from the benefit package that covered the individual
before a reduction in hours or involuntary
termination of employment to a different
benefit package with a higher applicable
premium that allows for an increase in the
premium amount charged to the Assistance Eligible Individual?
A-69. Yes. (But see Q&A-42 regarding
the ability of an Assistance Eligible Individual to enroll in coverage under a plan
that is different than the coverage in which
the individual was enrolled at the time of
the qualifying event pursuant to § 9501(a)
(1)(B) of the ARP.)

Bulletin No. 2021–23

Q-70. How is the premium assistance
credit calculated for an individual coverage health HRA?
A-70. The credit for an individual coverage HRA is limited to 102 percent of the
amount actually reimbursed with respect
to an Assistance Eligible Individual.

Example: An individual coverage HRA provides
a monthly benefit of the lesser of the premium for
the individual health insurance coverage purchased
by the employee or $1,000 and charges the maximum allowable administrative fee for COBRA continuation coverage, for a total maximum COBRA
premium of $1,020. Individual A and Individual B
are Assistance Eligible Individuals and are enrolled
in COBRA continuation coverage. For April 2021,
Individual A is reimbursed for a premium payment
for individual health insurance coverage of $900;
Individual B is reimbursed for $1,000 of a $2,000
premium payment for individual health insurance
coverage. The credit for April is $918 with respect to
Individual A and $1,020 with respect to Individual B.

CLAIMING THE COBRA PREMIUM
ASSISTANCE CREDIT
Q-71. Who is eligible for the premium
assistance credit under § 6432(a) of the
Code?
A-71. Under § 6432(a) of the Code, the
premium payee for continuation coverage
under § 9501(a)(1) of the ARP is eligible
for the credit.
Q-72. Who is the premium payee under
§ 9501(a)(1) of the ARP?
A-72. The premium payee is:
(1) The multiemployer plan, in the case
of a group health plan that is a multiemployer plan (as defined in § 3(37)
of ERISA);
(2) The common law employer maintaining the plan, in the case of a
group health plan, other than a multiemployer plan, that is (a) subject to
Federal COBRA, or (b) under which
some or all of the coverage is not provided by insurance (that is, a plan that
is self-funded, in whole or in part);
(3) The insurer providing the coverage,
in the case of any other group health
plan not described in (1) or (2) (generally, fully insured coverage subject
to State continuation coverage requirements).
Q-73. May a governmental entity be a
premium payee, and therefore eligible for
the premium assistance credit?
8

A-73. Yes. A premium payee may include the government of any State or political subdivision thereof, any Indian tribal government (as defined in § 139E(c)
(1)), any agency or instrumentality of any
of the foregoing, and any agency or instrumentality of the Government of the United States that is described in § 501(c)(1)
and exempt from taxation under § 501(a).
Q-74. When does the premium payee
become entitled to the premium assistance
credit?
A-74. As of the date on which the premium payee receives the potential Assistance Eligible Individual’s election of COBRA continuation coverage, the premium
payee is entitled to the credit for premiums not paid by an Assistance Eligible
Individual by reason of § 9501(a)(1) for
any periods of coverage that began before
that date.8 The premium payee is entitled
to the credit for the premiums not paid by
an Assistance Eligible Individual for each
subsequent period of coverage as of the
beginning of each period of coverage that
the individual does not pay the premiums
by reason of § 9501(a)(1) in accordance
with the individual’s election, without regard to when the premium payee could
have required the payment of any premium. (See Q&A-86 for information regarding entitlement to the credit if an Assistance Eligible Individual erroneously pays
the premium.)
Example: A premium payee’s COBRA period
of coverage is a calendar month with COBRA premium payments due on the tenth day of each calendar month. The premium payee pays its employees
semi-monthly, with payroll periods ending on the
fifteenth of the month and the last day of the month.
On June 17, 2021, the premium payee receives a COBRA election from a potential Assistance Eligible
Individual who elects COBRA continuation coverage as of April 1, 2021. The premium payee is entitled to a credit as of June 17, 2021, for the premiums
not paid by the Assistance Eligible Individual for the
periods of coverage April 1, 2021, through April 30,
2021, May 1, 2021, through May 31, 2021, and June
1, 2021, through June 30, 2021. Assuming the Assistance Eligible Individual does not notify the premium payee that the Assistance Eligible Individual is
no longer eligible for COBRA premium assistance
(and the premium payee does not otherwise become
aware that the Assistance Eligible Individual is ineligible), the premium payee becomes entitled to the
credit as of July 1, 2021, for the premiums not paid
by the Assistance Eligible Individual for the period
of coverage of July 1, 2021, through July 31, 2021.

(Assuming the facts remain as stated, the premium
payee would be entitled to the credit on (i) August 1,
2021, for the period of coverage of August 1, 2021,
through August 31, 2021, and (ii) September 1, 2021,
for the period of coverage of September 1, 2021,
through September 30, 2021.)

Q-75. How does a premium payee
claim the premium assistance credit?
A-75. A premium payee claims the
credit by reporting the credit (both the
nonrefundable and refundable portions of
the credit, as applicable) and the number
of individuals receiving COBRA premium
assistance on the designated lines of its
federal employment tax return(s), usually
Form 941, Employer’s Quarterly Federal
Tax Return.
In anticipation of receiving the credit
to which it is entitled, the premium payee may (1) reduce the deposits of federal employment taxes, including withheld taxes, that it would otherwise be
required to deposit, up to the amount of
the anticipated credit, and (2) request an
advance of the amount of the anticipated
credit that exceeds the federal employment tax deposits available for reduction
by filing Form 7200, Advance Payment
of Employer Credits Due to COVID-19.
See Notice 2021-24 for more information regarding the reduction in deposits
for the credit and other employment tax
credits.
Example 1: Under the facts in the Example in
Q&A-74, the premium payee should report the credit
for April through June 2021 on the Form 941 for the
second quarter of 2021.
Example 2: Same facts as in the Example in
Q&A-74, except that the premium payee receives
a COBRA election from an Assistance Eligible Individual on July 17, 2021, and the individual elects
COBRA continuation coverage as of June 1, 2021.
The premium payee becomes entitled to a corresponding credit as of July 17, 2021, for the premiums
not paid by the Assistance Eligible Individual for
the periods of coverage of (1) June 1 through June
30, 2021, and (2) July 1 through July 31, 2021. The
premium payee should report the total credit on the
Form 941 for the third quarter of 2021, including the
credit for the periods of coverage from June 1, 2021
through June 30, 2021.

Q-76. When may a premium payee reduce its deposits of federal employment
taxes and, if applicable, file Form 7200 to
request an advance of the anticipated premium assistance credit that exceeds the
federal employment tax deposits available
for reduction for a quarter?

A period of coverage is defined under § 9501(a)(9)(H) as a monthly or a shorter period with respect to which premiums are charged by the plan or issuer.

Bulletin No. 2021–23

1187

June 7, 2021

A-76. A premium payee may reduce its
deposits of federal employment taxes in
anticipation of the credit to which the premium payee has become entitled with regard to a period of coverage as of the date
the premium payee is entitled to the credit
as described in Q&A-74. If the anticipated credit exceeds the federal employment
tax deposits available for reduction, the
premium payee may file Form 7200 to
request an advance payment of the credit.
The Form 7200 may be filed after the end
of the payroll period in which the premium payee became entitled to the credit.
Deposits may not be reduced, and advances may not be requested, for a credit
for a period of coverage that has not begun. Form 7200 must be filed before the
earlier of (1) the day the employment tax
return for the quarter in which the premium payee is entitled to the credit is filed,
or (2) the last day of the month following
that quarter. The premium payee entitled
to the credit should also report any advance payments received in anticipation
of the credit for the quarter on the employment tax return.

Example: Same facts as in the Example in Q&A74. The premium payee may reduce its federal employment tax deposits as of June 17, 2021, the date
the Assistance Eligible Individual elected COBRA
continuation coverage, in anticipation of the credit to
which the premium payee has become entitled. However, if the credit exceeds the available reduction in
deposits, the premium payee may file Form 7200 to
request an advance for the remaining credit after the
end of the semi-monthly payroll period in which the
premium payee became entitled to the credit. Thus,
because the Assistance Eligible Individual elected
COBRA continuation coverage on June 17, 2021,
the premium payee may seek an advance beginning
on July 1, 2021, the day after the end of the payroll
period of June 16 through June 30, 2021.

Assuming the Assistance Eligible Individual did not notify the premium payee
that the Assistance Eligible Individual is
no longer eligible for COBRA continuation coverage (and the premium payee did
not otherwise become aware of the Assistance Eligible Individual’s ineligibility),
the premium payee becomes entitled to
an additional credit as of July 1, 2021, for
the premiums not paid by the Assistance
Eligible Individual for the period of coverage of July 1 through July 30, 2021. The
premium payee may reduce its federal
employment deposits as of July 1, 2021,
in anticipation of the credit to which the
premium payee has become entitled. If
the anticipated credit exceeds the feder-

June 7, 2021

al employment tax deposits available for
reduction, the premium payee may file
Form 7200 to request an advance for the
remaining credit. However, because the
semi-monthly payroll period in which the
premium payee becomes entitled to the
credit does not end until July 15, the premium payee may not seek an advance for
the credit until July 16, 2021, even though
it may reduce deposits on July 1, 2021, the
day the premium payee is entitled to the
credit.
Q-77. How is the premium assistance
credit claimed if the premium payee does
not have any employment tax liability, for
example, in the case of a multiemployer
plan with no employees?
A-77. If the premium payee entitled
to claim the credit does not have any employment tax liability, the premium payee should claim th

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Affb3b87575706f72. Public record. Not legal advice.