Last week, the IRS provided information that under the federal economic stimulus package, employers need to claim credit for COBRA health insurance premiums they pay for former employees. The information is posted on the IRS website and includes answers to 20 frequently asked questions. The information also includes an updated version of Form 941, the quarterly payroll tax return that employers must use to claim credit for the COBRA subsidy.
The stimulus law, the American Recovery and Reinvestment Act (ARRA), authorizes a 65% federal subsidy for continuing health care coverage under COBRA for employees who are laid off between September 1, 2008 and December 31, 2009. ARRA was enacted February 17 and the IRS notes additional forms are being revised to implement the COBRA subsidy. More information may be found at http://www.irs.gov/newsroom/article/0,,id=204505,00.html
