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COBRA Insurance and Taxes

Posted on: March 31st, 2011 by Cobra Insurance Guide

COBRA Insurance and TaxesMany people do not know that if they qualified for the 65% reduction in COBRA expenses under the federal stimulus package, they may actually be responsible for repaying the entire amount or part of the amount depending on their income.  For most people this will not be the case, however if your income is high enough, you may have to repay this at tax time.  Luckily, the math is fairly easy but it will not be apparent right away in most tax software programs (i.e. a question will not pop up asking you if you pay COBRA premiums or received the subsidy). It is extremely important to make sure this is captured correctly so you do not incur expenses and late fees at a later date.

H&R Block At Home and COBRA Insurance:  Find the interview screen titles, Get Started: Taxes, Penalties, and Payments.  From there, find the Taxes, Penalties, and Payments page, and then click on the plus sign that is located next to Other Taxes, Penalties, and Payments.  From there, you will need to check off COBRA assistance and then the program will calculate any amount you need to repay based on the income you reported.

TurboTax and COBRA Insurance: To find out if you need to repay COBRA insurance expenses in Turbo Tax, you will need to the Wages and Income section and then choose Explore On My Own. From there, find the Less Common Income tab and choose Visit All.  Continue to click through the options until you get to the Let’s Work on Any Miscellaneous Income question and then click on the COBRA insurance Premium Assistance button.  This will calculate, based on your income, if you need to repay any of the 65% subsidy, which is considered income if your income is high enough, by the federal government, it will be calculated at this point.

Doing Your Taxes Yourself and COBRA  Insurance:  While you are completing your taxes you will want to find Worksheet F, which is on page 24 of Publication 502. Then look on your 1040 form to Line 60 and add in the recapture amount listed there.

Will COBRA Insurance Change Under the New Health Care Reform Bill?

Posted on: March 31st, 2011 by Cobra Insurance Guide

Will COBRA Insurance Change Under the New Health Care Reform Bill?Under the newly passed Patient Protection and Affordable Care Act, there are no changes to the current COBRA insurance laws and regulations.  This means that under COBRA insurance laws you and your family will still be able to elect to receive health insurance coverage with COBRA if you meet the qualifying conditions and elect to sign up for continuation of medical insurance with COBRA.

However, in 2014 under the Patient Protection and Affordable Care Act, consumers will have the option to purchase health care exchanges in your state or region instead of continuing to maintain medical insurance under COBRA insurance.  Each state will be required by law to begin a health insurance exchange program which is intentioned to provide more affordable medical insurance to residents of the state or region.  With the exchange, U.S. citizens and legal immigrants will be able to compare the costs of health insurance and the elect their care.  The idea behind this is that the information will be much more widely available which will drive costs down.  The materials provided in the health insurance exchange will provide standardized materials and marketing information for all types of health insurance in your area thus making it easier to determine if keeping COBRA insurance if the best option for you.

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