Payroll Managers Sound Off On The COBRA Subsidy/Payroll Credit 

(Published June 2009)

Reprinted from PAYROLL LEGAL ALERT, a widely read payroll management newsletter that keeps payroll executives up-to-date on the latest IRS regulations, DOL guidance, and government rulings that affect your payroll administration responsibilities. Click here to get more information, or sign up for a risk-free subscription. 

Payroll departments mostly toil away in anonymity.  Now, all of that's changed, of course.  The COBRA subsidy and related payroll deposit offset/quarterly credit have thrust Payroll into the spotlight.  So we wanted to know how Payroll managers are coping with all this new found attention.  Most respondents to our survey are handling the spotlight well.

And the survey says...The survey results show that Payroll is ably managing the subsidy and credit.  Small businesses, where the same person processes both the payroll and COBRA billing, have the advantage.  Contrast: Using outside parties for payroll and COBRA processing seems to have frustrated several respondents, who commented that they were waiting for all parties to get on the same page.  Other survey results revealed the following.

• 81.8% of respondents have been impacted by the subsidy/payroll credit.
  
  
• 9.1% of respondents said that Payroll or Benefits were responsible for tracking employees who may be eligible for the subsidy; this burden falls disproportionately on outside third-party COBRA administrators (54.5%) and, to a lesser extent, on HR (27.3%).  
  
  
• 80% of respondents will take the full credit on their 941 forms, rather than offset their payroll deposits.