More Guidance on Extended COBRA Coverage under ARRA

IRS_LogoAs part of the enormous stimulus package in the American Recovery and Reinvestment Act of 2009, the federal government included some relief for laid-off employees: COBRA Coverage Under ARRA. Some of the unanswered questions are starting to be answered.

The IRS has posted information: COBRA Health Insurance Continuation Premium Subsidy, with COBRA: Answers for Employers.

The COBRA subsidy amount is reimbursed as a tax credit. Employers should use the updated Form 941 (.pdf), Employer’s Quarterly Federal Tax Return, to report their COBRA premium assistance payments. So employers have to come out of pocket for the health insurance premiums for their “involuntarily terminated” employees, but get a reduction on their quarterly employment taxes. Line 12a on Form 941 (.pdf) is for the COBRA premium assistance payments.

The Department of Labor has put together a collection of information on COBRA Continuation Coverage Assistance Under The American Recovery And Reinvestment Act Of 2009. That site has more detailed information on employee eligibility.

See also:

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6 Responses to More Guidance on Extended COBRA Coverage under ARRA

  1. Doug Cornelius March 12, 2009 at 10:44 am #

    Here are a few other resources:

    Common Misconceptions About COBRA Subsidy Provisions in Stimulus Bill

    An In-Depth Look at the New COBRA Provisions in Stimulus Bills

    Both articles are by the Littler Government Affairs Team and posted on the Washington DC Employment Law Update

  2. Jen November 3, 2009 at 6:05 pm #

    What will happen to the ARRA after December 2009? How much the beneficiaries will pay after December 31 2009?

  3. Shirley Baxter October 15, 2009 at 5:18 pm #

    Please let me know ASAPP if there is anything in the lines to extend COBRA beyond the 18 months?


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