Comments on: New COBRA reporting required in 2009?

By: Darlene

Darlene — Mon, 09 Mar 2009 20:17:48 +0000

Lucia – the math is not hard to do. assuming $775 is the premium plus 2%, the ee would pay 775 x 35% or $271.25/month. If said cobra participant pays the full 775 for March and April, you’d owe them back a credit of $503.75 x 2 months.

By: lucia

lucia — Mon, 09 Mar 2009 18:55:04 +0000

question if you have an employee who was term 09/01/2008 making cobra payments of 775.00 a month how much can they expect to have to pay as of may 2009
and does employer remburse them for there part of payments as of march 1 2009

By: Marilyn

Marilyn — Mon, 09 Mar 2009 17:30:27 +0000

Jon – we/the employer don’t decide if they qualify or not based on earnings. That will be on the ex-employee. If they take the 65% reduction and don’t qualify based on their earnings, they are penalized when they file their tax rturn.

By: Jon

Jon — Tue, 03 Mar 2009 16:10:54 +0000

How do we determine what the fromer employees new income is to qualify or disqualify them and their family? We will need to know their new income as well as their spouce’s income I suppose. Perhaps requesting their pay stubs and W-2’s from previous years?

By: Karen

Karen — Tue, 03 Mar 2009 01:09:20 +0000

Connie: Since you get to take the credit on your payroll taxes, it’s almost an immediate payback, assuming you are on an every two week payroll cycle. Remember, the employee has to sign up for COBRA and still has to be able to afford 35% of the cost (a bit challenging out of a small UI check) – before you need to cough up the difference. You take the credit on your next payroll cycle.

By: Connie

Connie — Mon, 02 Mar 2009 22:20:41 +0000

I know you think it will not cost us as employers ANYTHING for this COBRA ACT, but, where do you think the money will come from upfront? Think about this! If we are laying people off it’s because we can’t afford them and or their benefits.
Soooo where is the money going to come from to pay our Insurance Co. before the Government pays us back? Insurance Co. DO NOT give you a credit line. Do we jepordize the rest of the staffs benefits or how would you suggest we do this?
Maybe they will give us a zero% line of credit so we can pay the COBRA at the time or better yet, a STIMULIS package to bail us out.

By: Karen

Karen — Mon, 02 Mar 2009 16:39:58 +0000

For all, this is how this will work: To help workers who are involuntarily terminated from work, the government’s now offering to subsidize 65% of COBRA premium payments. Once an employee pays his or her 35% share, the company must then front the rest of the money. The employer will pay the insurer directly, then claim the amount as an offset against payroll tax liabilities. Payroll will report any subsidies made and take the offset on an updated Form 941 the IRS will soon release.

Employers will have to pay the premiums for up to nine months for workers (and their families) who are involuntarily terminated between 9/1/08 and 12/31/09. Anyone who was terminated after the 9/1/08 start date and the date’s enactment but didn’t take the coverage because of the expense has 60 days to elect COBRA and take advantage of the subsidy.

Employees with an annual income of $125,000 ($250,000 for families) don’t qualify for this assistance.

This provision will take effect with the first COBRA payment period – March 1st, for most employers. Form 941 reporting will also likely be effective for first quarter 2009.

By: Karen

Karen — Mon, 02 Mar 2009 16:35:43 +0000

This reply is for Pat A. and all who feel similarly. Don’t you get it? You will be reimbursed for the cost. You won’t have to lay anyone off to afford this since you will get your money back. What is so wrong with that? At least your employees, who you have to lay off, might be able to afford health coverage! No cost to you, employee gets an opportunity to keep insurance…. win win if you ask me.

By: Karen

Karen — Mon, 02 Mar 2009 16:35:20 +0000

This reply is for Pat A. and all who feel similarly. Don’t you get it? You will be reimbursed for the cost. You won’t have to lay anyone off. You will get your money back. What is so wrong with that? At least your employees, who you have to lay off, might be able to afford health coverage! No cost to you, employee gets an opportunity to keep insurance…. win win if you ask me.

By: Pat A

Pat A — Mon, 02 Mar 2009 01:08:10 +0000

This will be an expensive 4 years and hopefully there will be more than school teachers and union workers still employeed. He is going to force small buisness to not provide any health care. currently we pay 100 percent of health care to employees that are working. It is terible that we have to lay people off. The reason is not because they deserve it, it is because the workload has dropped and can not afford them. This includes there insurance, now we will have to lay off a couple of more people to offset the cost. It is based on a number and the number is going up thanks obama