SMB COBRA Changes for 2009?

If the Obama administration gets its way, SMBs may include certain subsidies to help terminated employees keep their health care.

Democrats want to provide a tax credit to employers who pay all or part of the COBRA premimums. The credit will offset Form 941 payroll taxes also known as the Employers's Quarterly Federal Tax Return.

The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a law passed by the U.S. Congress and signed by President Reagan that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment.

COBRA also allows for coverage for up to 18 months. However if the individual is deemed disabled by the Social Security Administration, coverage may continue for up to 29 months. Divorce coverage may continue for up to 36 months.

COBRA costs in a 2006 survey averaged $9,914 per year, 19% higher than two years ago. Today that number is not available yet, but most assuredly it has gone up another 20%.