Posted on April 19, 2010 by Tiffany Schmidt

COBRA Subsidy Extended Again!

Late in the day on April 15 or Tax Day as many of us generally think of it, President Obama signed a bill extending the COBRA subsidy to May 31, 2010. The new bill is again retroactive, covering any employees who were terminated or laid off between April 1-April 15. Daniel Schwartz from the Connecticut Employment Law blog, discusses the President’s actions in more detail.

If you terminated or laid-off any employees between April 1 and April 15, those employees now fall under the COBRA subsidy and you will need to revisit the information you provided to the former employees and issue an updated COBRA notice.

This is the second time the COBRA subsidy has been extended and there is a chance it could be extended again, so it is important to speak with your legal counsel and obtain the most updated information about COBRA before terminating or laying off employees.

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Posted on March 3, 2010 by Tiffany Schmidt

COBRA Subsidy Extended To March 31, 2010 and Retroactive to February 28, 2010

Daniel Schwartz from the Connecticut Employment Law blog, reported this morning President Obama signed a bill yesterday extending the COBRA subsidy. The bill which provides a temporary extension of certain programs specifically extends the COBRA subsidy, which had expired on Sunday, February 28, 2010, to March 31, 2010. The bill is retroactive to February 28, 2010.

How does this affect employers? If you terminated any employees on Monday, March 1 and Tuesday, March 2, those employees now fall under the COBRA subsidy and you will need to revisit the information you provided to the former employees and issue an updated COBRA notice.

Because the government keeps extending the subsidy, it is important to speak with your legal counsel about any COBRA-related questions before terminating employees, so you have the most up-to-date information.

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Posted on January 15, 2010 by Tiffany Schmidt

Update on COBRA Continuation Coverage Assistance

In February 2009, President Obama signed The American Recovery and Reinvestment Act of 2009 (ARRA), which included changes to health insurance benefit provisions under COBRA. Under the ARRA, eligible former employees, enrolled in their employer’s health plan at the time they lost their jobs, are only required to pay 35% of the cost of COBRA coverage. Employers must treat the 35% payment by eligible former employees as full payment, and in return the employers are entitled to a credit for the other 65% of the COBRA cost on their payroll tax return.

Originally, the federal government’s reduction of health insurance premiums was to last nine months for covered workers who were involuntarily terminated on or before December 31, 2009. Last month, the ARRA was amended to extend health insurance premium assistance to eligible employees for up to 15 months, and to those who were involuntarily terminated on or before February 28, 2010.

In Minnesota, qualified individuals can file for the Minnesota COBRA Premium Subsidy program, where the State will pay the 35% cost of the COBRA coverage to the individual’s former employer. It is being reported the Minnesota House is intending to make a proposal extending the benefits under the Minnesota COBRA Premium Subsidy Program during the upcoming legislative session.

What do employers need to do?

  • Update your COBRA notices (General - rtf) (Alternative – rtf) to reflect the accurate eligibility period for use in any involuntary terminations between now and February 28, 2010.
  • Notify employees who were involuntarily terminated after September 1, 2008, and are or were receiving premium assistance, of these changes (rtf), so they may determine if the extension applies to them.
     
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