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Be Sure to Maintain Documentation for the COBRA subsidy
under ARRA
Under the American Recovery and
Reinvestment Act of 2009, certain individuals who
are eligible for COBRA continuation health coverage,
or a similar coverage under state law, may receive a
subsidy for 65% of the premium paid. These
individuals are required to pay only 35% of the
premium, while the employer pays the remaining 65%
and is then "reimbursed" by taking a credit on its
quarterly payroll tax form.
If you have employees in this situation,
it is important for you to maintain proper supporting
documentation for the credit claimed. Such
documentation includes, but is not limited to:
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Information on the receipt,
including dates and amounts, of the assistance
eligible individuals’ 35 percent share of the
premium.
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In the case of an insured plan, copy
of invoice or other supporting statement from the
insurance carrier and proof of timely payment of the
full premium to the insurance carrier required under
COBRA.
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In the case of a self-insured plan,
proof of the premium amount and proof of the
coverage provided to the assistance eligible
individuals.
Attestation of involuntary termination,
including the date of the involuntary
termination (which must be during the period
from Sept. 1, 2008, to Dec. 31, 2009), for
each covered employee whose involuntary
termination is the basis for eligibility for
the subsidy. Proof of each assistance eligible
individual’s eligibility for COBRA coverage
at any time during the period from Sept. 1,
2008, to Dec. 31, 2009, and election of
COBRA coverage.
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A record of the SSN’s of all covered
employees, the amount of the subsidy
reimbursed with respect to each covered
employee, and whether the subsidy was
for one individual or two or more
individuals.
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Other documents necessary to verify the
correct amount of reimbursement.
This documentation must be
maintained, but will not be required to be submitted
to the IRS with Form 941.
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click here or call us at
815-788-2932
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Complete Payroll, Inc.
380 N. Terra Cotta Rd
Suite D
Crystal Lake, IL 60012
815.788.2932
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