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ARRA - COBRA California

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  • ARRA - COBRA California

    Hi!

    This ARRA -COBRA stuff is fairly confusing for me. So, hopefully, you can help me understand better.

    For example, one thing I recognize is that the employer's cost is submitted with the Cobra participant when the premium is paid.
    However, if we've a third-party administrator for Cobra and receipt of payments from the Cobra participant, how does ARRA affect that?

    Thanks!
    Last edited by lltuser; 03-04-2009, 02:45 PM.

  • #2
    I am not sure that anyone has a really good understanding on this, but I will take a shot. Bob's medical was costing $500/mn and Bob gets terminated. We will ignore the 102% because I am feeling lazy and do not want to have to look that up. The ARRA assumption is that the employer will initially pay 65% of COBRA costs ($325) and later get that money back from the feds as a credit on their 941 quarterly filing. That means the employee still has to pay the remaining $175 in the example.

    Of course, what do I know? It is not like the regulations have been published or anything. Currently it is just a lot of people reading the law and guessing on what they think the rules will end up being. Most of what I have heard can be found at the following three sources.

    http://www.irs.gov/newsroom/article/...204708,00.html

    http://www.dol.gov/ebsa/cobra.html

    http://www.alston.com/files/Publicat...20Bulletin.pdf
    Last edited by DAW; 03-04-2009, 03:00 PM.
    "Reality is that which, when you stop believing in it, doesn't go away".
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