The Internal Revenue Service announced (IR-2010-9) that The American Recovery and Reinvestment Act of 2009 (ARRA) was amended to extend eligibility for the COBRA premium subsidy. This amendment extends the length of the COBRA subsidy period from nine months to 15 months for individuals who are eligible for COBRA continuation coverage related to an involuntary termination occurring between September 1, 2008 and February 28, 2010.
For eligible individuals whose nine months of COBRA subsidy payments has ended, the new law provides an extended period for them to make retroactive payments for their 35% share of COBRA premiums.
Employers must provide COBRA coverage to individuals who are eligible for the subsidy and who pay 35% of the COBRA premium. Employers are reimbursed for the other 65% by claiming a credit for the subsidy on their payroll tax returns. Employers must maintain supporting documentation for the claimed credit.
Group health plan administrators and others responsible for administering a federal COBRA subsidy program must notify assistance-eligible individuals by February 17 to inform them that the plan has been extended and expanded. The U.S. Department of Labor issued updated model notices reflecting these extensions.
If you have questions, please contact us at 404-262-7920 or via our website at http://www.joneskolb.com/.
Thursday, January 28, 2010
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