17 February 2009
by
New Agency PartnersIn an
effort to help you better understand the changes to COBRA under the
“The American Recovery and Reinvestment Act of 2009 (ARRA), New
Agency Partners offers the following summary and key dates.
In addition, detailed information and links to websites
are provided to the left and we will continue to add
pertinent information as it becomes available. |
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Summary
-
The COBRA changes affect both the
federal COBRA provisions and the Public Health Service Act
program that provides similar extension benefits for public
programs. In addition, the subsidy provisions apply to state
continuation coverage that is comparable to federal COBRA
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An individual
is eligible for the COBRA premium subsidy if he or she is:
involuntarily terminated from employment during the period
beginning September 1, 2008 through December 31, 2009 and is
eligible to elect COBRA during that time.
-
ARRA provides
a subsidy of 65% of the COBRA continuation coverage premiums for
eligible individuals for a maximum of 9 months, so that an
eligible individual will only have to pay 35% of the COBRA
premium to obtain coverage.
-
The subsidy
is offset by a tax credit against the employer’s wage
withholdings and FICA payroll taxes.
Key Dates
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Date of
enactment is February 17, 2009.
-
The date the
subsidy is effective is for the first period of coverage on or
after February 17, 2009. (example – March 1, 2009 for calendar
plans)
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Useful
Links:
Cobra Changes and the American Recovery and Reinvestment Act (PDF)
Department of Labor Premium Reduction Fact Sheet (PDF)
Click here for
information related to American Recovery and Investment Act of 2009
Click here for a copy of the IRS Press Release
Click here
for a copy
of the:
IRS Q & A
IRS Form
941
IRS
Form 941 Instructions
Click here to go to
the Department of Labor |
