New Rule for COBRA Health Insurance

The 2009 Tax Act made changes to the health benefit provisions of COBRA. Eligible former employees who were enrolled in their employer's health plan when they lost their job need only pay 35% of the cost of COBRA coverage, while employers are entitled to a credit for the other 65% of the COBRA cost on their payroll tax return. The IRS posted guidance, including questions and answers for employers, at www.irs.gov/newsroom/article/0,,id=204505,00.html.