Employee Benefits: Stimulus Bill Information
The ARRA provides a nine-month COBRA premium subsidy for individuals and their dependents who are entitled to COBRA as a result of an employee being involuntarily terminated from a job between September 1, 2008, and December 31, 2009. The subsidy phases out at income levels between $125,000 and $145,000 for taxpayers, or between $250,000 and $290,000 for joint filers. The subsidy is equal to 65 percent of the normal COBRA premium charged to COBRA recipients, and is funded by the federal government. However, employers have to "front" the subsidy. In return, employers may claim a dollar-for-dollar credit against their payroll taxes to be reimbursed for the subsidy. Employers must identify eligible individuals and have new notice obligations related to this subsidy.
COBRA Premium: The ARRA provides a nine-month COBRA premium subsidy for individuals and their dependents who are entitled to COBRA as a result of an employee being involuntarily terminated from a job between September 1, 2008, and December 31, 2009. The subsidy phases out at income levels between $125,000 and $145,000 for taxpayers, or between $250,000 and $290,000 for joint filers. The subsidy is equal to 65 percent of the normal COBRA premium charged to COBRA recipients, and is funded by the federal government. However, employers have to "front" the subsidy. In return, employers may claim a dollar-for-dollar credit against their payroll taxes to be reimbursed for the subsidy. Employers must identify eligible individuals and have new notice obligations related to this subsidy.
