The Washington Report
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May 26, 2021
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
Note to Subscribers: Holiday Publication Schedule
The Washington Report will not be published on June 2, 2021. Look for your next Aon Washington Report on Wednesday, June 9, 2021.
Health
IRS Publishes Draft Forms 1094/1095-C
On May 24, 2021, the Internal Revenue Service (IRS) released draft forms of the text of 2021 Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns and 2021 Form 1095-C: Employer-Provided Health Insurance Offer and Coverage. These health insurance information forms are used by employers and plans to report insurance coverage under the Affordable Care Act (ACA).
The Draft 2021 IRS Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns is available here.
The Draft 2021 IRS Form 1095-C: Employer-Provided Health Insurance Offer and Coverage is available here.
A listing of all available IRS Draft Forms is available here.
IRS Publishes Draft Forms 1094/1095-B
On May 21, 2021, the IRS released draft forms of the text of 2021 Form 1094-B: Transmittal of Health Coverage Information Returns and 2021 Form 1095-B: Health Coverage, as required by the ACA. These forms are early release drafts which the IRS provides for general information.
The Draft 2021 IRS Form 1094-B: Transmittal of Health Coverage Information Returns is available here.
The Draft 2021 IRS Form 1095-B: Health Coverage is available here.
A listing of all available IRS Draft Forms is available here.
IRS Releases Guidance on Premium Assistance for COBRA Benefits
On May 18, 2021, the IRS released Notice 2021-31, which provides guidance for employers, plan administrators, and health insurers regarding the new credit available to them for providing continuation health coverage to certain individuals under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Specifically, the Notice provides direction (in the form of 86 questions and answers) on the application of Section 9501 of the American Rescue Plan Act of 2021 (ARPA) relating to the temporary premium assistance for COBRA continuation coverage.
ARPA provides a temporary 100% reduction in the premium that individuals would have to pay when they elect COBRA continuation health coverage following a reduction in hours or an involuntary termination of employment. The new law provides a corresponding tax credit for the entities that maintain group health plans, such as employers, multiemployer plans, and insurers. The 100% reduction in the premium and the credit are also available with respect to continuation coverage provided for those events under comparable state laws, sometimes referred to as "mini-COBRA." Notice 2021-31 provides information regarding the calculation of the credit, the eligibility of individuals, the premium assistance period, and other information vital to employers, plan administrators, and insurers to understand the credit.
For additional information, see the Aon bulletin titled IRS Issues Guidance on ARPA’s COBRA Subsidies in the Publications section of the newsletter.
The IRS news release is available here.
IRS Notice 2021-31 is available here.
Aon Publications
IRS Issues Guidance on ARPA’s COBRA Subsidies
The Internal Revenue Service (IRS) has issued its promised guidance on the American Rescue Plan Act’s (ARPA’s) COBRA premium assistance subsidy. The guidance takes the form of 86 questions and answers on the ARPA COBRA subsidy rules.
ARPA provides temporary COBRA subsidies for employees who are involuntarily terminated (other than for gross misconduct) or experience a reduction in hours. The ARPA COBRA subsidy amount is 100% of the cost of COBRA coverage and is available from April 1, 2021, through September 30, 2021. Although the Department of Labor previously issued guidance in the form of frequently asked questions (FAQs) last month, the IRS FAQs address questions regarding the implementation and administration of the ARPA COBRA subsidies that have arisen in the interim.
The Aon bulletin is available here.