Stimulus Bill heads up for employers

[BulldogTom]

In reading the news on the stimulus bill, there is one provision that might affect cash flow at your business clients. The COBRA rules have changed (this affects employers with 20 or more employees). Anyone who laid off or fired employees from Sept. 1, 2009 will have to offer another 60 day period for the employees to elect COBRA coverage, and the employee will only have to pay 35% of the cost. The remainder is picked up by the employer, but refunded in the form of a credit on the next tax return (at least that is how I am reading it in the news). The employer must keep it up for 9 months.

If you are doing the bookkeeping for any businesses, you may want to read up on this provision. It can affect your client's cash flow at a time when cash might be tight.

Tom

Lodi, CA

[kcjenkins]

Like maybe take under a company that is struggling already, which was why they had to lay off? Congress loves to try to 'fix' things but they often do not take into consideration the residual effects of their generosity. Just like the auto industry, that on the one hand they are trying to save jobs, while at the same time with the other hand they are demanding CAFE standards that are killing jobs.