Vision Payroll

January 20, 2010

Tip of the Week: Hot HR Topics for 2010

Do you need to know the most important employment legislation, HR case laws, workplace trends, and major employee issues anticipated for 2010 and how they affect employers? In this month’s HRCast, a recording provided by our team of HR Pros and available exclusively on MyHRSupportCenter, you’ll learn more about these seven hot HR topics:

  1. Employment Litigation
  2. Social Networking
  3. Expanded FMLA and Military Leave
  4. Pandemic Illness Preparedness
  5. ARRA COBRA Subsidies
  6. Health Care Reform
  7. Employee Free Choice Act

Visit MyHRSupportCenter regularly not only for our HRCasts, but also to get late-breaking compliance alerts, best practices to implement, and HR tools to use every day. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

July 18, 2009

IRS Provides Guidance to State Agencies for Allocating COBRA Credits

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS explained how state agencies should allocate the COBRA premium reduction credit. Often a single state agency may provide health care coverage to employees of several other state agencies and local government units. Generally, the credit is attributed to the agency or unit that was the former employer whose termination of the employee made the employee eligible for the subsidy. When a plan is subject to COBRA under the Public Health Services Act (PHSA) and the former employee is required to pay the thirty-five percent share directly to the agency that maintains the health plan, however, that agency may claim the credit as long as it has received notification that the former employee was involuntarily terminated and that the former employing agency will not claim the credit. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

July 14, 2009

IRS Provides Guidance to Controlled Groups for Allocating COBRA Credits

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS discussed the results when a group health plan (other than a multiemployer plan) covers employees of two or more employers that are members of a single controlled group. A controlled group is considered a single employer for purposes of employee benefits but not for payroll taxes. Consequently, the credit is attributed to the former employer whose termination of the employee made the employee eligible for the subsidy. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

July 13, 2009

IRS Provides Guidance to Health Plans for Allocating COBRA Credits

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS explained that when a group health plan covers employees of two or more unrelated employers, then the credit is attributed to the former employer whose termination of the employee made the employee eligible for the subsidy. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

July 12, 2009

IRS Provides Guidance on Information Reporting For COBRA Premium Subsidies

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS confirmed that employers, multiemployer plans, and insurers are not required to report on Form W-2 or Form 1099 any premium subsidies provided to Assistance Eligible Individuals (AEIs). They are requited to keep records and supporting documentation for any such payments to AEIs and to support any credit claimed on Form 941. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

July 11, 2009

IRS Provides Guidance on Documentation Required by Insurers and Multiemployer Plans

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS explained that when insurers or multiemployer plans are entitled to claim the COBRA premium reduction credit, they should obtain a statement from the employee or the employee’s former employer. A properly completed form, Request for Treatment as an Assistance Eligible Individual may be used as the required statement and maintained along with the employer’s name and address. Barring “fraud, malfeasance or misrepresentation of a material fact” or knowledge of or reason to know of the same, the IRS will not challenge the treatment of the former employee by insurers and multiemployer plans as involuntarily terminated. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

July 7, 2009

IRS Provides Guidance on Credits for Employers Using Form 2678 Agents

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS provided information for an employer who has elected to file Form 2678, Employer/Payer Appointment of Agent. In such situations, the employer does not file Form 941; the agent files Form 941 using its own employer identification number. If the employer is entitled to claim a credit, the agent should claim the credit on its Form 941 and reduce the amount of taxes paid on behalf of the employer. The employer should not file a zero Form 941 showing only the credit as a refundable amount. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

July 6, 2009

IRS Provides Guidance on Premiums Paid from an HRA

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS clarified that when assistance eligible individuals (AEIs) pay their COBRA premiums on a pretax basis from a health reimbursement arrangement (HRA), the premiums are treated as paid by the employer, not the employee. Consequently, the AEIs are not considered to have paid their thirty-five percent share of the premium for purposes of calculating the allowable credit. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

June 30, 2009

IRS Provides Guidance on Amendments to State COBRA Law

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS reviewed the impact of amendments to state law. COBRA premium subsidies would apply to coverage elected during a special election period under amended state laws. This is true even if the state law allows coverage to begin later than the first coverage period beginning after February 16, 2009. If the election to begin COBRA coverage as of a later date is made, the nine-month period for premium subsidy would still begin effective with the first period of coverage after February 16, 2009. In addition, depending on state law, a delay in beginning coverage could affect the preexisting condition exclusion. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

June 28, 2009

IRS Provides Guidance on Extended FEHBP Election Period Coverage

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS discussed individuals eligible for the extended federal (or FEHBP) COBRA election period. Such individuals must be offered coverage “effective with the first period of coverage beginning” after February 16, 2009. The employer or health plan may allow coverage to begin as of a later date. If the election to begin COBRA coverage as of a later date is made, the nine-month period for premium subsidy would still begin effective with the first period of coverage after February 16, 2009. Additionally, any period between the first period of coverage beginning after February 16, 2009 and the effective date of coverage “is not disregarded for purposes of the rules limiting preexisting condition exclusions.” Periods between the involuntary termination and the first period of coverage beginning after February 16, 2009 are disregarded for the preexisting condition exclusions. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

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