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Prepared by Mike Ewing, J.D.
Director of Research
United Actuarial Services, Inc.
(317) 580-8659
Fax (317) 580-8651
email: mewing@unitedactuarial.com
© United Actuarial Services, Inc. 2009
2009-19
March 12, 2009
IRS/DOL Post Guidance on Filing
for COBRA Premium Subsidy
The Internal Revenue Service (IRS) and the Department of Labor
(DOL)
have
posted guidance on how group health plans, including multiemployer
plans,
may
obtain the COBRA premium assistance subsidy provided at Section 3001
of the
American Recovery and Reinvestment Act of 2009 (ARRA).
See Client Bulletin 2009-15 for more details on the COBRA premium subsidy:
the “second chance” election rights for individuals who were involuntarily
terminated between September 1, 2008 and February 17, 2009 but did not
then elect COBRA. ARRA Section 3001(a)(4)(A),
that timely elected “second chance” elections receive the subsidy retroactive
to March 2009. ARRA Section 3001(a)(4)(B),
the reimbursement process for individuals who pay full premiums in March
and/or April 2009 even though they would have been subsidy eligible, ARRA
Section 3001(12)(E), and
the special notice which must be sent to individuals who were involuntarily
terminated during the above period and those who involuntarily terminate
after February 1, 2009, ARRA Section 3001(a)(7).
In short, a multiemployer group health plan that wishes to obtain its share of the
COBRA premium subsidy will (like single-employer plans) file a request for the
subsidy by using IRS Form 941 – Employers Quarterly Federal Tax Return. Form
941 and the Form 941 Instructions
have
been revised to accommodate COBRA
premium subsidy requests. As the amount of payroll taxes that could be offset by
the plan would be insufficient to reimburse the plan for its share of the COBRA
premium subsidy, the Form 941 will essentially serve as a method of getting direct
subsidy payments from the Treasury Department in the form of a “refund” equal to
the unreimbursed amount of the subsidy paid by the plan.
CLIENT BULLETIN