UBP blog


What employers and COBRA-payable entities need to keep track of for the IRS

Filed under: ARRA Act COBRA Subsidy,COBRA — ubpblogger @ 9:03 am
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One thing HR professionals know is that you need to document everything that’s regulated, and COBRA is highly regulated. As you may already know, the 65% of a former employee’s COBRA premium that you, the employer, pay to the insurance carrier up front is subsidized through a refund or reimbursement on the newly updated Form 941. But, in order for your company to actually get this reimbursement, the IRS requires you to maintain a considerable amount of supporting documentation.

According to the IRS, employers and other COBRA-payable entities must maintain the following:

  • Information on the receipt, including dates and amounts, of the employees’ 35% share of the premium.
  • For insured plans, a copy of the invoice or other supporting statements from the insurance carrier, as well as proof of timely payment of the full premium to the insurance carrier.
  • An attestation, including termination dates, that employees were involuntarily terminated between September 1, 2008, and December 31, 2009. (i.e. an ex-employee’s termination letter)
  • Proof that employees and dependents were entitled to COBRA at any time between September 1, 2008, and December 31, 2009, plus their COBRA election documentation.
  • A record of employees’ Social Security numbers, the amount of the subsidy reimbursed with respect to each COBRA-covered employee, and whether the subsidy was for one individual or two or more individuals. (we recommend that employers keep a log of this information)

Did you know that your company needed to maintain all of this information?

Does your Fiscal department know about these requirements?

Do you have the steps in place to be sure the necessary documentation and information is kept track of for COBRA subsidies?

This is just some of the vital information you need to know about the ARRA COBRA subsidy and the new employer requirements it has created.

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