COBRA
Premium Assistance Credit
The
American Recovery and Reinvestment Act of 2009
(ARRA) allows a credit against employment taxes for providing
COBRA premium assistance to assistance eligible individuals.
For periods of COBRA continuation coverage beginning after February
16, 2009, a group health plan must treat an assistance eligible
individual as having paid the required COBRA continuation coverage
premium if the individual elects COBRA coverage and pays 35%
of the amount of the premium.
The
65% of the premium not paid by the assistance eligible individuals
is reimbursed to the employer or other entity maintaining the
group health plan. The reimbursement is made through a credit
against employment tax liabilities. The credit is taken on line
12a of Form 941, line 11a of Form 944, or line 13a of Form 943
once the 35% of the premium is paid by or on behalf of the assistance
eligible individual. The credit is treated as a deposit made on
the first day of the return period (quarter or year).
Anyone
claiming the credit for COBRA assistance payments must maintain
the appropriate information to support their claim.
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