COBRA eligibility extended to May 31

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The COBRA health insurance subsidy eligibility period has been extended until May 31.

The Consolidated Omnibus Budget Reconciliation Act, or COBRA, subsidy was established by the American Recovery and Reinvestment Act, to help workers who lose their jobs maintain their employer-sponsored health insurance.

Workers who are involuntarily terminated from their jobs between Sept. 1, 2008 and May 31 may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. In some cases, workers who had their hours reduced and later lost their jobs may also be eligible for the subsidy.

Employers must provide COBRA coverage to eligible employees who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a credit for the subsidy on their payroll tax returns: Form 941, Employers Quarterly Federal Tax Return, Form 944, Employer’s Annual Federal Tax Return, or Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees.

For more information about the COBRA subsidy, including questions and answers for employers, employees or former employees, visit the Internal Revenue Service website.

Some people who are eligible for the COBRA subsidy may also qualify for the health coverage tax credit, and may want to choose that instead, as the HCTC pays 80 percent of health insurance premiums for those who qualify.