Employer Form 941?

[Guest Benefits Broker CO]

I have an insurance client who is now self-employed and therefore does not report payroll taxes to the IRS. However, this client has a former employee who are currently covered under Colorada state continuation (employer never met COBRA employee requirements) - the former employee lost coverage 1/1/2009 when involuntarily terminated due to the employer (insurance client) closing their office. The employer/client still functions as a business, so the insurance policy is still in place (thus allowing the former employee to continue coverage).

Since the employer/client does not have payroll taxes, does anyone know how would this employer be reimbursed for their 65% of the premium for the terminated employee? I tried the IRS information line, but this situation is not addressed.

Thanks.

[GMK]

As I recall, your client will get a credit or a check from the government, but the details on this have not been published as far as I know.

[Guest David Lacy]

I have an insurance client who is now self-employed and therefore does not report payroll taxes to the IRS. However, this client has a former employee who are currently covered under Colorada state continuation (employer never met COBRA employee requirements) - the former employee lost coverage 1/1/2009 when involuntarily terminated due to the employer (insurance client) closing their office. The employer/client still functions as a business, so the insurance policy is still in place (thus allowing the former employee to continue coverage).

Since the employer/client does not have payroll taxes, does anyone know how would this employer be reimbursed for their 65% of the premium for the terminated employee? I tried the IRS information line, but this situation is not addressed.

Thanks.

Have you considered filing a Form 941 with all zeros except for the amounts on the lines for premium assistance? The same issue comes up for those who do have WH, but whose expected premium assistance far exceeds the amout of their WH. They intend to file 941s and expect they will get a "refund" of even more than they paid in. How would your client be any different?

[MARYMM]

I have an insurance client who is now self-employed and therefore does not report payroll taxes to the IRS. However, this client has a former employee who are currently covered under Colorada state continuation (employer never met COBRA employee requirements) - the former employee lost coverage 1/1/2009 when involuntarily terminated due to the employer (insurance client) closing their office. The employer/client still functions as a business, so the insurance policy is still in place (thus allowing the former employee to continue coverage).

Since the employer/client does not have payroll taxes, does anyone know how would this employer be reimbursed for their 65% of the premium for the terminated employee? I tried the IRS information line, but this situation is not addressed.

Thanks.

I thought the subsidy only applied to Federal COBRA, not state continuation programs

[oriecat]

Nope, it can apply to both.

See the new FAQs here:

http://www.dol.gov/ebsa/faqs/faq-cobra-pre...eductionER.html

[Guest SLSHAHAN]

I just researched this for my clients. Under HR 1-348 on page 8 HR 1-348it talks about who is reimbursed for premium subsidy (heading COBRA PREMIUM ASSISTANCE). Item number (3) says "in the case of any group health plan not described in (1) or (2), the insurer providing coverage under a group health plan [is eligible for reimbursement]"

In Oregon, where we have a state continuation law, the insurance carrier will be collecting the 35% and receiving the 65% subsidy for members from the feds.

Not sure if that helps, but it sounds like it might????