How will the reimbursements be made to employers, multiemployer plans and health insurers?
The 65% COBRA subsidy will be provided through a payroll tax credit on that appropriate entities’ payroll tax deposit. The entity is permitted to offset some payroll tax liabilities (federal withholding, FICA) with the amount of the subsidy. However, if the subsidy exceeds the entity’s payroll tax liabilities, the entity will receive a refund. The amount of the subsidy is based on the actual amount an individual must pay for COBRA. If an employer is paying for a portion of the COBRA premium, this amount must be deducted before calculating the 35% of premium owed by the individual and the 65% subsidy that can be claimed.
