2011 US Code
Title 26 - Internal Revenue Code
Subtitle F - Procedure and Administration (§§ 6001 - 7874)
Chapter 65 - ABATEMENTS, CREDITS, AND REFUNDS (§§ 6401 - 6432)
Subchapter B - Rules of Special Application (§§ 6411 - 6432)
Section 6432 - COBRA premium assistance
View MetadataPublication Title | United States Code, 2006 Edition, Supplement 5, Title 26 - INTERNAL REVENUE CODE |
Category | Bills and Statutes |
Collection | United States Code |
SuDoc Class Number | Y 1.2/5: |
Contained Within | Title 26 - INTERNAL REVENUE CODE Subtitle F - Procedure and Administration CHAPTER 65 - ABATEMENTS, CREDITS, AND REFUNDS Subchapter B - Rules of Special Application Sec. 6432 - COBRA premium assistance |
Contains | section 6432 |
Date | 2011 |
Laws in Effect as of Date | January 3, 2012 |
Positive Law | No |
Disposition | standard |
Source Credit | Added Pub. L. 111-5, div. B, title III, §3001(a)(12)(A), Feb. 17, 2009, 123 Stat. 461; amended Pub. L. 111-144, §3(b)(5)(C), Mar. 2, 2010, 124 Stat. 45. |
Statutes at Large References | 58 Stat. 682 88 Stat. 829 123 Stat. 461, 115, 455, 3472, 3473 124 Stat. 45, 43, 1117 |
Public Law References | Public Law 93-406, Public Law 111-5, Public Law 111-118, Public Law 111-144, Public Law 111-157 |
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The person to whom premiums are payable under COBRA continuation coverage shall be reimbursed as provided in subsection (c) for the amount of premiums not paid by assistance eligible individuals by reason of section 3001(a) of title III of division B of the American Recovery and Reinvestment Act of 2009.
(b) Person entitled to reimbursementFor purposes of subsection (a), except as otherwise provided by the Secretary, the person to whom premiums are payable under COBRA continuation coverage shall be treated as being—
(1) in the case of any group health plan which is a multiemployer plan (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974), the plan,
(2) in the case of any group health plan not described in paragraph (1)—
(A) which is subject to the COBRA continuation provisions contained in—
(i) the Internal Revenue Code of 1986,
(ii) the Employee Retirement Income Security Act of 1974,
(iii) the Public Health Service Act, or
(iv) title 5, United States Code, or
(B) under which some or all of the coverage is not provided by insurance,
the employer maintaining the plan, and
(3) in the case of any group health plan not described in paragraph (1) or (2), the insurer providing the coverage under the group health plan.
(c) Method of reimbursementExcept as otherwise provided by the Secretary—
(1) Treatment as payment of payroll taxesEach person entitled to reimbursement under subsection (a) (and filing a claim for such reimbursement at such time and in such manner as the Secretary may require) shall be treated for purposes of this title and section 1324(b)(2) of title 31, United States Code, as having paid to the Secretary, on the date that the assistance eligible individual's premium payment is received, payroll taxes in an amount equal to the portion of such reimbursement which relates to such premium. To the extent that the amount treated as paid under the preceding sentence exceeds the amount of such person's liability for such taxes, the Secretary shall credit or refund such excess in the same manner as if it were an overpayment of such taxes.
(2) OverstatementsAny overstatement of the reimbursement to which a person is entitled under this section (and any amount paid by the Secretary as a result of such overstatement) shall be treated as an underpayment of payroll taxes by such person and may be assessed and collected by the Secretary in the same manner as payroll taxes.
(3) Reimbursement contingent on payment of remaining premiumNo reimbursement may be made under this section to a person with respect to any assistance eligible individual until after the reduced premium required under section 3001(a)(1)(A) of title III of division B of the American Recovery and Reinvestment Act of 2009 with respect to such individual has been received.
(d) DefinitionsFor purposes of this section—
(1) Payroll taxesThe term “payroll taxes” means—
(A) amounts required to be deducted and withheld for the payroll period under section 3402 (relating to wage withholding),
(B) amounts required to be deducted for the payroll period under section 3102 (relating to FICA employee taxes), and
(C) amounts of the taxes imposed for the payroll period under section 3111 (relating to FICA employer taxes).
(2) PersonThe term “person” includes any governmental entity.
(e) Employer determination of qualifying event as involuntary terminationFor purposes of this section, in any case in which—
(1) based on a reasonable interpretation of section 3001(a)(3)(C) of division B of the American Recovery and Reinvestment Act of 2009 and administrative guidance thereunder, an employer determines that the qualifying event with respect to COBRA continuation coverage for an individual was involuntary termination of a covered employee's employment, and
(2) the employer maintains supporting documentation of the determination, including an attestation by the employer of involuntary termination with respect to the covered employee,
the qualifying event for the individual shall be deemed to be involuntary termination of the covered employee's employment.
(f) ReportingEach person entitled to reimbursement under subsection (a) for any period shall submit such reports (at such time and in such manner) as the Secretary may require, including—
(1) an attestation of involuntary termination of employment for each covered employee on the basis of whose termination entitlement to reimbursement is claimed under subsection (a),
(2) a report of the amount of payroll taxes offset under subsection (a) for the reporting period and the estimated offsets of such taxes for the subsequent reporting period in connection with reimbursements under subsection (a), and
(3) a report containing the TINs of all covered employees, the amount of subsidy reimbursed with respect to each covered employee and qualified beneficiaries, and a designation with respect to each covered employee as to whether the subsidy reimbursement is for coverage of 1 individual or 2 or more individuals.
(g) RegulationsThe Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out this section, including—
(1) the requirement to report information or the establishment of other methods for verifying the correct amounts of reimbursements under this section, and
(2) the application of this section to group health plans that are multiemployer plans (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974).
(Added Pub. L. 111–5, div. B, title III, §3001(a)(12)(A), Feb. 17, 2009, 123 Stat. 461; amended Pub. L. 111–144, §3(b)(5)(C), Mar. 2, 2010, 124 Stat. 45.)
References in TextThe American Recovery and Reinvestment Act of 2009, referred to in subsecs. (a), (c)(3), and (e)(1), is Pub. L. 111–5, Feb. 17, 2009, 123 Stat. 115. Section 3001(a) of title III of division B of the Act enacted this section and sections 139C and 6720C of this title, amended section 35 of this title, and enacted provisions set out a note below. Section 3001(a)(1)(A), (3)(C) of the Act is set out as a note below. For complete classification of this Act to the Code, see Short Title of 2009 Amendment note set out under section 1 of this title and Tables.
The Employee Retirement Income Security Act of 1974, referred to in subsecs. (b)(1), (2)(A)(ii) and (g)(2), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, which is classified principally to chapter 18 (§1001 et seq.) of Title 29, Labor. Section 3(37) of the Act is classified to section 1002(37) of Title 29. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables.
The Public Health Service Act, referred to in subsec. (b)(2)(A)(iii), is act July 1, 1944, ch. 373, 58 Stat. 682, which is classified generally to chapter 6A (§201 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 201 of Title 42 and Tables.
Amendments2010—Subsec. (a). Pub. L. 111–144, §3(b)(5)(C)(i), substituted “section 3001(a) of title III of division B of the American Recovery and Reinvestment Act of 2009” for “section 3002(a) of the Health Insurance Assistance for the Unemployed Act of 2009”.
Subsec. (c)(3). Pub. L. 111–144, §3(b)(5)(C)(ii), substituted “section 3001(a)(1)(A) of title III of division B of the American Recovery and Reinvestment Act of 2009” for “section 3002(a)(1)(A) of such Act”.
Subsecs. (e) to (g). Pub. L. 111–144, §3(b)(5)(C)(iii), added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively.
Effective Date of 2010 AmendmentPub. L. 111–144, §3(c), Mar. 2, 2010, 124 Stat. 45, provided that: “The amendments made by this section [amending this section and sections 35, 139C, and 6720C of this title, and amending provisions set out as a note under this section] shall take effect as if included in the provisions of section 3001 of division B of the American Recovery and Reinvestment Act of 2009 [Pub. L. 111–5, set out below] to which they relate, except that—
“(1) the amendments made by subsection (b)(1) [amending provisions set out as a note under this section] shall apply to periods of coverage beginning after the date of the enactment of this Act [Mar. 2, 2010];
“(2) the amendments made by subsection (b)(2) [amending provisions set out as a note under this section] shall take effect as if included in the amendments made by section 1010 of division B of the Department of Defense Appropriations Act, 2010 [Pub. L. 111–118, amending provisions set out a note under this section]; and
“(3) the amendments made by subsections (b)(3) and (b)(4) [amending provisions set out as a note under this section] shall take effect on the date of the enactment of this Act [Mar. 2, 2010].”
Effective DateSection applicable to premiums to which section 3001(a)(1)(A) of Pub. L. 111–5, set out as a note below, applies, see section 3001(a)(12)(D) of Pub. L. 111–5, set out as a note below.
Premium Assistance for COBRA BenefitsPub. L. 111–5, div. B, title III, §3001, Feb. 17, 2009, 123 Stat. 455, as amended by Pub. L. 111–118, div. B, §1010(a)–(d), Dec. 19, 2009, 123 Stat. 3472, 3473; Pub. L. 111–144, §3(a), (b)(1)–(4), Mar. 2, 2010, 124 Stat. 43, 44; Pub. L. 111–157, §3(a), (b), Apr. 15, 2010, 124 Stat. 1117, provided that:
“(a)
“(1)
“(A)
“(B)
“(i)
“(ii)
“(I) the employer involved has made a determination that such employer will permit assistance eligible individuals to enroll in different coverage as provided for this subparagraph;
“(II) the premium for such different coverage does not exceed the premium for coverage in which the individual was enrolled at the time the qualifying event occurred;
“(III) the different coverage in which the individual elects to enroll is coverage that is also offered to the active employees of the employer at the time at which such election is made; and
“(IV) the different coverage is not—
“(aa) coverage that provides only dental, vision, counseling, or referral services (or a combination of such services);
“(bb) a flexible spending arrangement (as defined in section 106(c)(2) of the Internal Revenue Code of 1986); or
“(cc) coverage that provides coverage for services or treatments furnished in an on-site medical facility maintained by the employer and that consists primarily of first-aid services, prevention and wellness care, or similar care (or a combination of such care).
“(C)
“(2)
“(A)
“(i) the first date that such individual is eligible for coverage under any other group health plan (other than coverage consisting of only dental, vision, counseling, or referral services (or a combination thereof), coverage under a flexible spending arrangement (as defined in section 106(c)(2) of the Internal Revenue Code of 1986), or coverage of treatment that is furnished in an on-site medical facility maintained by the employer and that consists primarily of first-aid services, prevention and wellness care, or similar care (or a combination thereof)) or is eligible for benefits under title XVIII of the Social Security Act [42 U.S.C. 1395 et seq.], or
“(ii) the earliest of—
“(I) the date which is 15 months after the first day that paragraph (1)(A) applies with respect to such individual,
“(II) the date following the expiration of the maximum period of continuation coverage required under the applicable COBRA continuation coverage provision, or
“(III) the date following the expiration of the period of continuation coverage allowed under paragraph (4)(B)(ii).
“(B)
“(C)
“(3)
“(A) such qualified beneficiary is eligible for COBRA continuation coverage related to a qualifying event occurring during the period that begins with September 1, 2008, and ends with May 31, 2010,
“(B) such qualified beneficiary elects such coverage, and
“(C) the qualifying event with respect to the COBRA continuation coverage consists of the involuntary termination of the covered employee's employment and occurred during such period or consists of a reduction of hours followed by such an involuntary termination of employment during such period (as described in paragraph (17)(C)).
“(4)
“(A)
“(B)
“(i) shall commence with the first period of coverage beginning on or after the date of the enactment of this Act [Feb. 17, 2009], and
“(ii) shall not extend beyond the period of COBRA continuation coverage that would have been required under the applicable COBRA continuation coverage provision if the coverage had been elected as required under such provision.
“(C)
“(i) beginning on the date of the qualifying event, and
“(ii) ending with the beginning of the period described in subparagraph (B)(i),
shall be disregarded for purposes of determining the 63-day periods referred to in section 701(c)(2) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1181(c)(2)], section 9801(c)(2) of the Internal Revenue Code of 1986, and section 2701(c)(2) of the Public Health Service Act [former 42 U.S.C. 300gg(c)(2); now 42 U.S.C. 300gg–3(c)(2)].
“(5)
“(6)
“(7)
“(A)
“(i)
“(I) the availability of premium reduction with respect to such coverage under this subsection, and
“(II) the option to enroll in different coverage if the employer permits assistance eligible individuals to elect enrollment in different coverage (as described in paragraph (1)(B)).
“(ii)
“(iii)
“(B)
“(i) the forms necessary for establishing eligibility for premium reduction under this subsection,
“(ii) the name, address, and telephone number necessary to contact the plan administrator and any other person maintaining relevant information in connection with such premium reduction,
“(iii) a description of the extended election period provided for in paragraph (4)(A),
“(iv) a description of the obligation of the qualified beneficiary under paragraph (2)(C) to notify the plan providing continuation coverage of eligibility for subsequent coverage under another group health plan or eligibility for benefits under title XVIII of the Social Security Act [42 U.S.C. 1395 et seq.] and the penalty provided under section 6720C of the Internal Revenue Code of 1986 for failure to so notify the plan,
“(v) a description, displayed in a prominent manner, of the qualified beneficiary's right to a reduced premium and any conditions on entitlement to the reduced premium, and
“(vi) a description of the option of the qualified beneficiary to enroll in different coverage if the employer permits such beneficiary to elect to enroll in such different coverage under paragraph (1)(B).
“(C)
“(D)
“(i) the Secretary of the [sic] Labor, in consultation with the Secretary of the Treasury and the Secretary of Health and Human Services, shall prescribe models for the additional notification required under this paragraph (other than the additional notification described in clause (ii)), and
“(ii) in the case of any additional notification provided pursuant to subparagraph (A) under section 8905a(f)(2)(A) of title 5, United States Code, the Office of Personnel Management shall prescribe a model for such additional notification.
“(8)
“(9)
“(10)
“(A)
“(B) COBRA
“(C) COBRA
“(D)
“(E)
“(F)
“(G)
“(H)
“(11)
“(A)
“(i) the number of individuals provided such assistance as of the date of the report; and
“(ii) the total amount of expenditures incurred (with administrative expenditures noted separately) in connection with such assistance as of the date of the report.
“(B)
“(i) the number of individuals provided premium reduction under this section;
“(ii) the average dollar amount (monthly and annually) of premium reductions provided to such individuals; and
“(iii) the total amount of expenditures incurred (with administrative expenditures noted separately) in connection with premium reduction under this section.
“(12) COBRA
“(A)
“(B)
“(C)
“(D)
“(E)
“(i)
“(I) make a reimbursement payment to such individual for the amount of such premium paid in excess of the amount required to be paid under subsection (a)(1)(A); or
“(II) provide credit to the individual for such amount in a manner that reduces one or more subsequent premium payments that the individual is required to pay under such subsection for the coverage involved.
“(ii)
“(iii)
“(13)
“(A)
“(B)
“(C)
“(14)
“(A)
“(B)
“(15)
“(A)
“(B)
“(C)
“(16)
“(A)
“(i) such individual was covered under the COBRA continuation coverage to which such premium relates for the period of coverage immediately preceding such transition period, and
“(ii) such individual pays, the amount of such premium, after the application of paragraph (1)(A), by the latest of—
“(I) 60 days after the date of the enactment of this paragraph [Dec. 19, 2009],
“(II) 30 days after the date of provision of the notification required under subparagraph (D)(ii), or
“(III) the end of the period described in section 4980B(f)(2)(B)(iii) of the Internal Revenue Code of 1986.
“(B)
“(C)
“(i)
“(I) such assistance eligible individual experienced an involuntary termination that was a qualifying event prior to the date of enactment of the Department of Defense Appropriations Act, 2010 [Dec. 19, 2009]; and
“(II) paragraph (1)(A) applies to such period by reason of the amendment made by section 1010(b) of the Department of Defense Appropriations Act, 2010 [Pub. L. 111–118].
“(ii)
“(D)
“(i)
“(ii)
“(iii)
“(17)
“(A)
“(i)
“(ii)
“(iii)
“(iv)
“(B)
“(C)
“(18)
“(b)
“(1)
“(A) premium assistance is provided under this section with respect to any COBRA continuation coverage which covers the taxpayer, the taxpayer's spouse, or any dependent (within the meaning of section 152 of the Internal Revenue Code of 1986, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of the taxpayer during any portion of the taxable year, and
“(B) the taxpayer's modified adjusted gross income for such taxable year exceeds $125,000 ($250,000 in the case of a joint return),
then the tax imposed by chapter 1 of such Code with respect to the taxpayer for such taxable year shall be increased by the amount of such assistance.
“(2)
“(A)
“(B)
“(i) the excess of [sic] described in subparagraph (B) of paragraph (1), by
“(ii) $20,000 ($40,000 in the case of a joint return).
“(3)
“(A) makes a permanent election (at such time and in such form and manner as the Secretary of the Treasury may prescribe) to waive the right to the premium assistance provided under this section, and
“(B) notifies the entity to whom premiums are reimbursed under section 6432(a) of such Code of such election.
“(4)
“(5)
“(6)
“(7)
[Pub. L. 111–157, §3(c), Apr. 15, 2010, 124 Stat. 1117, provided that: “The amendments made by this section [amending section 3001 of Pub. L. 111–5, set out above] shall take effect as if included in the provisions of section 3001 of division B of the American Recovery and Reinvestment Act of 2009 [Pub. L. 111–5].”]
[Pub. L. 111–118, div. B, §1010(e), Dec. 19, 2009, 123 Stat. 3473, provided that: “The amendments made by this section [amending section 3001 of Pub. L. 111–5, set out above] shall take effect as if included in the provisions of section 3001 of division B of the American Recovery and Reinvestment Act of 2009 [Pub. L. 111–5] to which they relate.”]
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