Title 26 — Internal Revenue CodeRelease 119-73

§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 68— ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter B— Assessable Penalties › Part I— GENERAL PROVISIONS › § 6720C

Last updated Apr 6, 2026|Official source

Summary

If you were required to tell your group health plan that you stopped being eligible for the COBRA premium assistance created by the American Rescue Plan Act of 2021 and you failed to do so, you owe a $250 penalty for each failure. If the failure was fraudulent, the penalty rises to the greater of $250 or 110 percent of the assistance you received after losing eligibility. No penalty applies if you had reasonable cause and were not willfully neglectful.

Full Legal Text

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.

Legislative History

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.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6720C

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73