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AIM Resource Page: The Economic Stimulus Bill

The $789 billion economic stimulus bill signed by President Barack Obama on February 17 contains complex provisions affecting the workplace. The provisions include a COBRA subsidy for unemployed people that will overlay a similar health insurance support program that has existed in Massachusetts for 18 years. AIM is working with federal and state officials to answer the many questions employers have about the stimulus.

AIM offers this Resource Page as a one-stop source for information, updates and events.

Resources

IRS Issues Guidance on COBRA Subsidy

The Internal Revenue Service has released administrative guidance related to the COBRA Premium Assistance program. The 27-page Notice 2009-27 addresses many of the nuances of administering this program in plain language and, in many cases, using multiple examples of how the guidance applies. Employers are encouraged to print and/or save a copy of this document.

Of particular interest:

• In-depth discussion of the definition of "involuntary termination." (Q&A 1 through 15 on Notice 2009-27)
• Clarification that a same-sex spouse is not eligible to be treated as an Assistance Eligible Individual (AEI) for purposes of premium assistance even if continuation is provided under Mass. Mini-COBRA.  (See Q&A 23 through 25 in Notice 2009-27).  Federal COBRA defines a qualified beneficiary as the employee, the employee's spouse, and/or the employee's dependent children. Same-sex spouses are excluded because their marriage does not meet the definition set forth in the federal Defense of Marriage Act.   As a reminder - domestic partners and any other individuals not meeting the above "qualified beneficiary" definition are also not eligible to be treated as AEIs.
• Clarification that an individual who is already enrolled in Medicare at the time of losing group health insurance due to an involuntary termination is not eligible to become and AEI, but is eligible to elect continuation coverage. (Q&A 41)
• If a retirement meets the definition of involuntary termination, retiree health coverage is eligible for the premium reduction if it is the same coverage available to active employees. (Q&A 28)

As always, AIM members are encouraged to call our toll-free HR Hotline (800-470-6277. There have always been many nuances to administering COBRA, but there are now multiple layers of complexity. We’re here to help!

AIM Offers Definitive Guide to COBRA Premium Assistance

The COBRA Premium Assistance provision of the federal stimulus law has left employers scrambling for answers amid confusion and sometimes contradictory information. Scramble no more. AIM, working directly with federal regulators, has produced a comprehensive, readable guide to your responsibilities as an employer under the COBRA subsidy program.

This AIM guide clarifies the ways in which the Premium Assistance program affects both the federal COBRA and Massachusetts Mini-COBRA laws. We also provide links to Department of Labor model documents and a roadmap for understanding which documents you must send to send to which people at which times.

Read the Guide

IRS Issues Guidance on Employer Tax Credits for COBRA Subsidies

The Internal Revenue Service (IRS) has issued its first guidance related to how employers will claim credit for the COBRA health insurance premiums they must subsidize for former employees and their dependents. The information is contained in a new section of the agency’s Web site, and includes links to helpful information, including a nicely done FAQ page. Form 941, Employer’s Quarterly Federal Tax Return, has been revised and will be sent to about 2 million employers by the middle of this month. This form is effective for the first quarter of 2009 and will be used by employers to recoup the funds used to subsidize COBRA premiums. IRS has also published Form 941 Instructions.

The Web site and an IRS News Release make clear that employers need not submit any additional information with the Form 941, but must “maintain supporting documentation for the credit claimed.” This information includes:

• Documentation of receipt of the assistance-eligible employee’s 35 percent share of the premium, including dates and amounts.
• Proof of each assistance-eligible employee’s eligibility for COBRA coverage, occurring between September 1, 2008 and December 31, 2009, and their election of COBRA continuation coverage.
• For insured plans, a copy of the invoice or other statement from the carrier plus proof of timely payment of the full premium to the carrier.
• For self-insured plans, proof of the premium amount and proof of coverage provided to those for whom the subsidy credit is claimed.
• Attestation of the former employee’s involuntary termination, including the date of termination.
• A record of the Social Security number of all covered employees, the amount of subsidy reimbursed for each one, and whether the subsidy was for one (1) individual or for two (2) or more individuals.
• “Other documents necessary to verify the correct amount of reimbursement.”

The IRS will continue to release guidance to help employers comply with their obligations under the American Recovery and Reinvestment Act. Information is also available through the Department of Labor Web site. The DOL FAQs for Employees and Families may be also be helpful to employers.

Employers who outsource their payroll tax filings are advised to be proactive in determining how the third party’s process will work. Always keep in mind that the employer bears ultimate responsibility for the accuracy of the information.
AIM will continue to monitor government releases to keep you informed. AIM members are encouraged to call our toll-free Hotline, 1-800-470-6277 with questions.

A Stimulating Challenge: Everything You Need to Know About the Stimulus COBRA Subsidy

Massachusetts employers are scrambling to understand a complex provision in the economic stimulus law that requires companies to subsidize 65 percent of COBRA premiums for individuals who involuntarily lose employment between September 1, 2008 and December 31, 2009. AIM's team of HR and government affairs professionals has been working late the past several days and has answers to the questions employers are asking.

Learn More

News

Stimulus Creates Second Program to Fund COBRA Benefits

Massachusetts employers will apparently be required to continue funding the state Medical Security Plan for unemployed workers while also paying a refundable 65 percent subsidy for COBRA benefits included in the economic stimulus bill. AIM has learned that despite exhaustive efforts by Massachusetts officials to integrate the two programs, employers will end up funding two programs intended to deliver health insurance benefits to The overlap of the state and federal health insurance programs one of many complex issues for employers emerging from the $789 billion stimulus measure.

Learn More

Seminars

A Stimulating Challenge for Employers:
Is Your Company Ready to Comply with the Stimulus Law?

President Obama signed The American Recovery and Reinvestment Act of 2009 (ARRA) on Tuesday, February 17.  The Act, aimed at jump-starting the faltering economy, will require many Massachusetts employers to make a significant, though temporary, outlay of cash. 

The key HR-related provision is a COBRA subsidy that requires employers to pay 65 percent of COBRA premiums for an employee whose “involuntary” termination occurs between September 1, 2008 and December 31, 2009. Employers will recover their money through a deduction from their quarterly federal payroll tax remittances, or, in some cases, directly from the Department of the Treasury. The requirement also applies to state-mandated insurance continuation which means Massachusetts employers of two or more employees must comply.

There are myriad notice and reporting requirements and many administrative and communication processes to get a handle on. AIM will help you sort it all out. We will cover the COBRA subsidy program in detail, provide a review of key COBRA concepts, and enhance your awareness of other ARRA provisions that could be important to your business.

Program content:

COBRA Subsidy

• Responsibilities of employers and plan administrators
• Eligibility criteria
• Required notices and special election periods, with timelines
• Required reporting to the Treasury Department
• Getting your money back – the mechanics and the potential delays
• Model notices, plus administrative tools and checklists
• Review of key COBRA administration concepts
• How this program affects the commonwealth’s existing Medical Security Program

Other ARRA Provisions

• Extension of Unemployment Insurance benefits
• Extension of Trade Adjustment Assistance for job losses in certain sectors
•  Expansion of Work Opportunity Tax Credit program – two new targeted categories

Seminar Fees:

AIM Members: $95
Non Member: $150