Compliance February 26, 2009

IRS Posts Added Info about Employer COBRA Tax Break

February 26, 2009 (PLANSPONSOR.com) - Employers can get some help in implementing the new rules for getting tax credits to cover their additional COBRA premium payments put in place as part of the federal government's economic stimulus package.
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Under the stimulus bill, eligible former employees who were enrolled in their employer’s health plan at the time they lost their jobs, are required only to pay 35% of the cost of COBRA coverage, with employers paying the remaining 65%. Employers are able to recoup their share of the cost on their payroll tax return.

The Internal Revenue Service (IRS) says it has posted to its Web site additional information on how the employer tax credit will work, including a series of questions and answers.

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Tax agency officials say they have also posted a revised version of the quarterly payroll tax return that employers will use to claim credit for the COBRA medical premiums they pay for their former employees.

The IRS said Form 941, Employer’s Quarterly Federal Tax Return, will also be sent to about 2 million employers in mid-March so employers can claim the credit, beginning with the first quarter of 2009.

“This is the first step in our effort to provide employers with information on this important health benefit for people who have lost their jobs,” said IRS Commissioner Doug Shulman. “We will continue our work in the weeks ahead to help employers implement this crucial change for the nation’s unemployed.”

According to the additional IRS information, employers must maintain supporting documentation for the credit claimed including:

  • documentation of receipt of the employee's 35% share of the premium.
  • in the case of insured plans, a copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier.
  • declaration of the former employee's involuntary termination.

The additional IRS information is available at http://www.irs.gov/newsroom/article/0,,id=204505,00.html . The Department of Labor also has information about the COBRA subsidy at http://www.dol.gov/ebsa/cobra.html .

Compliance February 25, 2009

Lawmakers Introduce U.S. Senate, House Secret Union Election Bills

February 25, 2009 (PLANSPONSOR.com) - U.S. Senators Jim DeMint (R-South Carolina), Chairman of the Senate Steering Committee, and Mike Enzi (R-Wyoming), Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee, have introduced legislation designed to guarantee the right of American workers to have a secret ballot election on whether to unionize.
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According to a press release, the Secret Ballot Protection Act (SBPA) would require secret ballot elections and helps protect workers from the certification of unions through card check only. It also protects workers from card check certifications approved by their employer without their consent, which is permitted under current law, the press release said.

Under current labor law, employers have the choice of asking workers to recognize a union as the exclusive bargaining representative based on a “card check,” or they can insist upon a secret ballot election administered by the National Labor Relations Board (NLRB). “Under this undemocratic ‘card check’ system, workers are forced to sign cards in support of a union without a secret ballot election, which allows bullying and peer pressure to influence votes. ‘Card check’ is completely unacceptable and un-American, and we must pass the Secret Ballot Protection Act to safeguard workers’ rights for good,” said DeMint, in the news release.

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“Americans get a private ballot when they choose their President, their Congressmen, their local councilmen, even their PTA leaders. Why should they not have the same right in the workplace?” added Enzi. “Working Americans deserve to choose what’s right for themselves without fear, coercion or pressure, and without having to publicly disclose or defend their views to hostile coworkers or unions. The right to a private ballot is one of the cornerstones of our democracy, and the Secret Ballot Protection Act will uphold that right for America’s workers.”

The announcement said that U.S. Representative John Kline (R-Minnesota) and Tom Price (R-Georgia) as well as Education and Labor Committee Ranking Member Buck McKeon (R-California) have introduced SBPA in the House with over 100 cosponsors including Minority Leader John Boehner (R-Ohio).

“Secret ballots are a hallmark of American Democracy. They protect individuals – whether they are voters on election day or workers deciding whether to organize – from public pressure, intimidation, or post-vote retribution,” said McKeon, in a statement. “The Secret Ballot Protection Act makes clear once and for all that no one should be able to deny workers the right to a secret ballot.”

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