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Severance and paying for COBRA
Benefits & Compensation
Severance and paying for COBRA
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Our severance package includes paying for the employee's COBRA for the period of time in which they receive severance. Should the amount paid by the company for COBRA be a taxable item for the employe
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Forums » Topic Forums » Benefits & Compensation » Severance and paying for COBRA
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Severance and paying for COBRA
posted at 12/14/2010 4:44 AM EST
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Posts: 2
First: 12/14/2010 Last: 5/18/2011 |
Our severance package includes paying for the employee's COBRA for the period of time in which they receive severance. Should the amount paid by the company for COBRA be a taxable item for the employee? |
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Severance and paying for COBRA
posted at 12/21/2010 10:05 AM EST
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Posts: 2
First: 12/21/2010 Last: 5/19/2011 |
If a former employer simply gives money to pay the premiums, and the funds' used is not restricted, then reimbursement is taxable to the ex-employee as wages.
If the former employer pays the premiums directly to the insurer or reimburses the ex-employee for the actual payment (or otherwise restricts fund use to premium payment), then reimbursement is excludable from income. If reimbursing the former employee directly for the COBRA payment, for the payment to be a tax-free reimbursement, the employer must obtain appropriate documentation that the premium payment was actually made. |
Forums » Topic Forums » Benefits & Compensation » Severance and paying for COBRA
