We can’t talk about COBRA compliance without really getting into what it means. COBRA stands for the Consolidated Omnibus Reconciliation Act of 1985. Now that’s a mouthful, which explains the abbreviation!

The federal law requires employers with 20+ employees to offer continuing healthcare coverage to their employees and dependents who would otherwise lose their health benefits due to a qualifying event, e.g., termination of employment, reduction of hours, divorce, etc. For more information on how COBRA works and to whom it applies, you can read about it on our COBRA Qualifying Event Quandary...

On May 18, 2021, the IRS issued Notice 2021-31. The notice provides guidance on tax breaks under the 2021 American Rescue Plan Act (ARPA) for continuation health coverage under COBRA.

We realize it’s a bit overwhelming, but our senior legal counsel, Michelle Barki, summarized the main points covered in the 41-page document. So don’t be scared; we are here to help!

1. Employers may require attestations to AEI status.

2. Involuntary Termination, like ARRA, is broadly interpreted based on facts and...