As a follow-up to the First Wednesday Tax Forum on the Cobra premium issue, Peter Anastopulos, an attorney with The Roberts Law Firm, advises that the federal government will be paying the tab. The government will reimburse the coverage provider via a tax credit against certain employment taxes. The Department of Labor FAQ states:
"The premium reduction (65 percent of the full premium) is reimbursable to the employer, insurer or health plan as a credit against certain employment taxes. If the credit amount is greater than the taxes due, the Secretary of the Treasury will directly reimburse the employer, insurer or plan for the excess."