The American Recovery and Reinvestment Act of 2009 (ARRA) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35% of their COBRA premiums and the remaining 65% is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.
Specific guidance from the U.S. Department of Labor can be found at their dedicated webpage: www.dol.gov/cobra
The IRS has published a revised Form 941, the “Employer’s Quarterly Tax Return,” and a 20 point Q&A on the subsidy provisions. The form and instructions address ARRA’s premium reporting requirements, while the Q&A answers many of the questions raised regarding the mechanics of premium processing and reimbursements. Both can be found at: www.irs.gov/newsroom/article/0,,id=204505,00.html
We will continue to post additional information as it becomes available.
Tagged with: ARRA • COBRA • Economic stimulus • subsidy
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