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Understand the COBRA premium subsidy

Learn how the American Rescue Plan Act of 2021 affects the COBRA health insurance program.

What’s happening with COBRA?

The recently passed American Rescue Plan Act of 2021 includes a 100% COBRA subsidy from the federal government starting April 1, 2021, through September 30, 2021. This allows employees who lost their jobs because of the COVID-19 situation, to stay on their company-sponsored health plan. As an employer, you’ll be able to take the COBRA subsidy credit for affected employees eligible under COBRA. 

What do employers need to do?

Although we expect employer COBRA subsidy credits to be applied against quarterly payroll taxes, we’re waiting for official IRS guidance so we can add the ability to apply for those credits in our payroll products. 

We’ll continue to update this page with the latest information from the IRS. Check back here for updates.

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