On February 17, 2009, the COBRA subsidy was signed into law. This is one of the most notable features of the ARRA or American Recovery and Reinvestment Act.
According to this plan, the employee will pay just 35% of the usual COBRA premium. If employees lose healthcare coverage due to termination, they will qualify for 65% government subsidy continued group insurance coverage.
The employee will pay just 35% of the usual COBRA premium. Under this plan, employees who lose healthcare coverage is due to terminate will qualify for a 65% government subsidy on continued group insurance coverage under COBRA.
A new U.S. Department of Labor COBRA subsidy fact sheet outlines this program. Under this program, the employer still pays the entire healthcare premium to the insurance company.
The employer can deduct 65% of the total premium from his or her payroll taxes. Under the ARRA COBRA subsidy, the employee pays $315, 35% of that amount. However, the employer can deduct $585 from his or her quarterly payroll taxes. The subsidy applies only to COBRA coverage since February 17, 2009, when the ARRA was signed into law.
Showing posts with label COBRA. Show all posts
Showing posts with label COBRA. Show all posts
Tuesday, March 31, 2009
Wednesday, February 25, 2009
Stimulus Plan Includes COBRA Subsidy
Obama administration’s stimulus plan offered COBRA subsidies and was signed into law on February 17, 2009. Many employers have questions about the subsidies. The subsidy applies beginning March 1, 2009.
The ARRA (American Recovery and Reinvestment Act of 2009) included a provision to subsidize extended health insurance coverage under COBRA for some eligible employees. These eligible employees referred to as “assistance eligible individual” (AEI) is laid off through no fault of his or her own, or is a dependent of a laid-off employee.
According to the ARRA, the COBRA subsidy does not apply to flexible spending accounts. The maximum time for each assistance eligible individual is nine months. Employee can get 35 percent of the COBRA premium. Every AEI qualifies for the subsidy. However, according to the individual tax returns, high-income individuals and their spouses will be required to repay the subsidy.
If the AEI does qualify as a high-income individual her or she may waive the subsidy voluntarily and must pay 100 percent of the COBRA premium.
The ARRA (American Recovery and Reinvestment Act of 2009) included a provision to subsidize extended health insurance coverage under COBRA for some eligible employees. These eligible employees referred to as “assistance eligible individual” (AEI) is laid off through no fault of his or her own, or is a dependent of a laid-off employee.
According to the ARRA, the COBRA subsidy does not apply to flexible spending accounts. The maximum time for each assistance eligible individual is nine months. Employee can get 35 percent of the COBRA premium. Every AEI qualifies for the subsidy. However, according to the individual tax returns, high-income individuals and their spouses will be required to repay the subsidy.
If the AEI does qualify as a high-income individual her or she may waive the subsidy voluntarily and must pay 100 percent of the COBRA premium.
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