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Reimbursement for the COBRA subsidy, and tax implications

  1. Question: I've been on COBRA since January; do I get reimbursed for the 65% for what I've paid so far?
    • Answer: No, the subsidy is not retroactive.
  2. Question: What will I get reimbursed for with this subsidy?
    • Answer: The subsidy for COBRA covers 65% of the cost for COBRA payments of eligible recipients for 9 months, made on or after March 1, 2009.
      • Qualified recipients may not begin to see reimbursements or reduced monthly premiums for COBRA until May or June of 2009.
      • If you paid for COBRA on your own in March and April, and you're otherwise eligible for the subsidy, your employer should reimburse you for those costs; either through a refund or an increased reduction in future premiums until you've recouped your costs.
  3. Question: Does the new COBRA subsidy cover anything besides monthly premiums?
    • Answer: No
  4. Question: Is there an income cap on the subsidy?
    • Answer: Yes,individuals with gross incomes of less than $124,000 and couples with incomes of less than $250,000 will qualify for the subsidy.
  5. Question: I made $160,000 in 2008, but I make less than that now that I'm on unemployment. Do I still qualify?
    • ¬†Answer: The income qualifications apply to the 2009 and 2010 tax years. Eligibility for Cobra subsidies doesn't depend on income, but:
      • If you're 2009 income exceeds $145,000 for individuals or $290,000 for families you'll have to pay the government back for the amount you were subsidized when you file your income taxes.
      • If your incomes is between $124,000 and $145,000 for individuals or $250,000 to $290,000 for families, you'll have to repay a portion of the subsidized amount.
  6. Question: Is the income limit based on total income or adjusted gross income?
    • Answer: The income limit is based onataxpayer's adjusted gross incomes in the 2009 and 2010 tax year.