Federal agencies provide COBRA subsidy guidance
The American Recovery and Reinvestment Act of 2009 provides for a 65% reduction in Consolidated Omnibus Budget Reconciliation Act (COBRA) premiums for up to nine months for those eligible for COBRA coverage who are involuntarily terminated between September 1, 2008, and December 31, 2009. Employers are entitled to a payroll tax credit for 65% of the COBRA cost. The Department of Labor (DOL), Internal Revenue Service (IRS), and the Department of Health & Human Services provide extensive information about the COBRA subsidy on their websites. Specifically, DOL’s website contains four model notices to inform particular groups of beneficiaries about the premium reduction. Likewise, DOL’s website offers an updated list of 27 employer frequently asked questions about the COBRA premium reduction. The IRS has issued a four part series of questions and answers on the following COBRA subsidy topics: administration and eligibility, form preparation, reporting and documentation, and taxability and recapture. The IRS has also issued Notice 2009-27, which discusses, among many other things, the definition of involuntary termination.
DOL COBRA subsidy webpage
IRS COBRA subsidy webpage
HHS COBRA subsidy webpage