An employee laid off or fired (for other than gross misconduct) between September 1, 2008 and December 31, 2009 is entitled to a subsidy of his or her COBRA premiums. Under the Stimulus Law, eligible former employees, enrolled in their employer's health plan at the time they lost their jobs, are required to pay only 35% of the cost of COBRA coverage. Employers will treat the 35% payment by the former employee as full payment, and claim a credit for the other 65% of the COBRA cost on the payroll tax return.

It is the employer's responsibility to notify employees of this subsidy, even if they didn't sign up for COBRA when they left.  The employer must go back through the records and identify every employee who was let go since last September, and notify them of their new benefit.  The subsidy is paid to the employer as a tax credit.  Maintain supporting documentation for the credit claimed.  Read the IRS news release here:  http://www.irs.gov/newsroom/article/0,,id=204709,00.html

The U.S. government has new rules for paperwork employers must collect as of April 2009.

·         There is a new I-9 form (Employment Eligibility Verification). You must discontinue using the form dated 06/05/07.

·         For all new hires, and to reverify any employee with expiring employment authorization, the employee must turn in the new I-9.

·         It is no longer acceptable for you as an employer to rely on expired passports or List B documents. It used to be permitted for you to accept expired documents, but no longer.