COBRA Guidance from the USDOL and IRS
By now, most everyone has regained a bit of composure after attempting to figure out what to do about the COBRA subsidy under the The American Recovery and Reinvestment Act of 2009. My perspective is that way too many organizations attempted to be first out of the gate with announcements for their clients regarding the new subsidy. The result? Even the most prestigious of law firms issued guidance that was just plain WRONG. To make matters worse, some issued new guidance and politely asked recipients to disregard the initial guidance. To make matters even more worse (is that proper English?), some of these firms quietly reissued publications on their websites and didn't advise that they had updated previously issued guidance.
Now, I am far from perfect, but my initial advice to my clients was this: CHILL! Within 72 hours of President Obama signing the Act, I had read a dozen conflicting fact sheets from seemingly well intentioned advisors. Why CHILL? Let's face it. Everyone is in the exact same boat. The USDOL and the IRS were slated to issue guidance shortly after the the law was signed. Many of the provisions of the subsidy were administratively impossible (hmmm, a negative tax liability on a 941?).
So, guess what? The IRS and the DOL have both issued guidance regarding the subsidy. Here are the links:
US Department of Labor - COBRA under the ARRA - it took me a while to find this one buried on the DOL website. Remember, this is the same website that suggests "Osama" when you search for President Obama......
US Department of Labor COBRA Premium Subsidy Fact Sheet
Revised Form 941 - The IRS says it's effective January 2009 - Cute.
IRS Form 941 Guidance Containing COBRA Subsidy Instructions Under ARRA - Yep, the form says it's effective January '09, but nicely buried on page 6, you will find instructions regarding the COBRA subsidy that went into effect, ummmm, February.
IRS Website Information on COBRA Premium Subsidy Under ARRA
So what's the point of all of my cynicism? The message here is to start with the guidance issued by the DOL and the IRS, be very wary of what you read that is meant to be guidance from others. It could be wrong and it's not necessarily in others' best interest to admit to you that they were wrong.
