The American Recovery and Reinvestment Act of 2009 (the Act) made changes to continuation health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA. Here are five fast facts on the changes related to employers:

1. Employers are required to pay the additional sixty-five percent of the premiums not paid by employees.
2. Employers may claim a credit on Form 941, Employer’s QUARTERLY Federal Tax Return, for their share of the COBRA premiums.
3. Payment of the premium subsidies by employers and the credits on Form 941 happen only after employees have paid their share of the premiums.
4. Supporting documentation for the credit must be maintained by employers, but need not be submitted with the Form 941.
5. Employers are required to pay the subsidy for eligible employees covered under COBRA or similar state laws.

Over the next several days, Vision Payroll will be posting additional articles on implementing the changes to COBRA continuation coverage required by the Act as well as other changes to payroll and HR by other sections of the Act. We’re also planning a seminar on implementing these changes, so contact Vision Payroll if you’d like to attend.