Under the latest COVID relief bill, employers must now provide financial assistance to former employees (assuming they meet the bill’s criteria) to help pay for COBRA premiums from April 1, 2021, through September 30, 2021.
This lifts a huge burden off of the employee since COBRA benefits are prohibitively expensive for most of the population. Now, Americans who have lost their jobs can afford coverage and health care for their families. An added bonus is that the payments will be excluded from the individual’s income on their 2021 tax returns.
Employers will receive a payroll tax credit incentive, which will enable them to support their former employees without taking a financial hit. The COBRA premium subsidy credit may be advanced to the employer by filing Form 7200.
This is important news to share with friends or family who may think they need to go without health care because they can’t afford it. It also helps businesses bridge the gap and provide a small sense of relief to employees who were unexpectedly laid off.
As we move toward “normalcy” following the pandemic, this is one relief bill that can help businesses maintain morale and offer something positive during a difficult time. An employee who feels that their employer cares about their well-being will likely not burn any bridges after parting ways and could potentially pave the way for a return to employment when things improve. That’s a good thing!
Give me a call at 201.787.6542 or email me for guidance on this important provision.