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AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (ARRA) COBRA CONTINUATION ASSISTANCE

AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (ARRA) COBRA CONTINUATION ASSISTANCE. Presented by: Lori L. Athmann. American Recovery and Reinvestment Act (ARRA). Overview Geared toward layoffs Effective February 17, 2009 Reduction in COBRA premiums Additional Election Opportunities

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AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (ARRA) COBRA CONTINUATION ASSISTANCE

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  1. AMERICAN RECOVERY ANDREINVESTMENT ACT OF 2009 (ARRA)COBRA CONTINUATION ASSISTANCE Presented by: Lori L. Athmann

  2. American Recovery and Reinvestment Act (ARRA) Overview • Geared toward layoffs • Effective February 17, 2009 • Reduction in COBRA premiums • Additional Election Opportunities • Involuntarily terminated employees

  3. Who Does ARRA Apply To? • Private sector employers • Governmental employees • 20 or more employees • Minnesota Continuation Coverage

  4. What Does ARRA Provide? • Premium reductions • 35% from eligible individual • 65% reimbursed to coverage provider through tax credits • Additional Election Opportunities • Between September 1, 2008, and February 16, 2009 • Even if employee did not elect COBRA • Within 60 days of receiving notice

  5. Who is Eligible Employee? • Involuntarily terminated • Eligible for COBRA • Elects COBRA • Adjusted gross annual income • Includes dependants • Review by Department of Labor

  6. Notice Requirements: • By April 19, 2009 • General Notice • Full • Abbreviated • Extended COBRA election notice

  7. How Do Employers Receive Tax Credits? • 65% portion of premium • Credit on payroll tax filing • Offset payroll tax deposits • Overpayment at end of quarter • Form 941 • Cannot claim until employee’s share is paid

  8. Employer Reporting Requirements • Certify employee receiving subsidy • Information on the receipt of employee 35% share • Copy of invoice from insurance carrier • Proof of eligibility and election • SSN • Amount of subsidy reimbursed as a payroll tax credit

  9. QUESTIONS?

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