COBRA Premium Assistance Credit

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Individuals involuntarily terminated from their jobs between September 1, 2008 and December 31, 2009 are eligible for a 65% reduction in their COBRA premium payment. This reduction will be for the continuation of coverage beginning after February 16, 2009 and will continue through December 31, 2009. The employee is only responsible for payment of 35% of the COBRA premium.

The remaining 65% of the premium will be paid by the employer or other entity funding the group health plan and reimbursed through a credit on their payroll tax liabilities. The employer will claim the credit on Form 941 line 12a once the former employee pays their 35% of the premium.

This credit is a part of the American Recovery and Reinvestment Act of 2009 (ARRA).

 For additional questions, see the following link to the IRS website.

http://www.irs.gov/newsroom/article/0,,id=204505,00.html

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