§6720C — Title 26 Internal Revenue Code | U.S. Code

§6720C Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance

Title 26 › Subtitle Subtitle F— - Procedure and Administration › Chapter CHAPTER 68— - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter Subchapter B— - Assessable Penalties › Part PART I— - GENERAL PROVISIONS › § 6720C

Last updated Apr 6, 2026|Official source

Summary

Anyone who must tell a group health plan under section 9501(a)(2)(B) of the American Rescue Plan Act of 2021, but fails to notify the plan when and in the way the Secretary of Labor requires, must pay $250 for each such failure. If the failure is fraudulent, the penalty is the larger of $250 or 110 percent of the premium assistance paid after eligibility ended under section 9501(a)(1)(A). No penalty applies if the missed notice was for a reasonable cause and not due to willful neglect.

Title 26, §6720C

Internal Revenue Code — Source: USLM XML via OLRC

(a)Except in the case of a failure described in subsection (b) or (c), any person required to notify a group health plan under section 9501(a)(2)(B) of the American Rescue Plan Act of 2021 who fails to make such a notification at such time and in such manner as the Secretary of Labor may require shall pay a penalty of $250 for each such failure.

(b)In the case of any such failure that is fraudulent, such person shall pay a penalty equal to the greater of—

(1)$250, or

(2)110 percent of the premium assistance provided under section 9501(a)(1)(A) of the American Rescue Plan Act of 2021 after termination of eligibility under such section.

(c)No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 9501(a) of the American Rescue Plan Act of 2021, referred to in subsecs. (a) and (b)(2), is section 9501(a) of title IX of Pub. L. 117–2, Mar. 11, 2021, 135 Stat. 127, which is set out as a note under section 4980B of this title.

Prior Provisions

A prior section 6720C, added Pub. L. 111–5, div. B, title III, § 3001(a)(13)(A), Feb. 17, 2009, 123 Stat. 464; amended Pub. L. 111–144, § 3(b)(5)(D), Mar. 2, 2010, 124 Stat. 45, related to penalty for failure to notify health plan of cessation of eligibility for COBRA premium assistance, prior to repeal by Pub. L. 115–141, div. U, title IV, § 401(d)(7)(B), Mar. 23, 2018, 132 Stat. 1212.