Hr News & Views Blog

August 21, 2009

HR Fact Friday: COBRA Enrollment Doubles After Launch of Subsidy Program

Filed under: COBRA — Tags: ARRA, COBRA, health insurance, healthcare, Hewitt, subsidy — Paul @ 6:54 am

Enrollments in COBRA (health continuation coverage) rose from less than 20% to nearly 40% since the U.S. government enacted a new subsidy program, according to a report by Hewitt Associates, a consulting firm.

Signed into law in February 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated. To qualify for the subsidy, individuals must have a qualifying event for COBRA coverage that is the employee’s involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

Hewitt looked at COBRA enrollment activity for 200 large employers both before and after the enactment of the program. From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38%, up from 19% for the period of September 2008 through February 2009.

Hewitt estimates that without the subsidy, the average worker would spend $8,800 a year in COBRA healthcare costs. With the subsidy, the average worker would spend about $3,000 a year.

Source: HR.BLR.com 8/19/2009

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March 19, 2009

DOL Publishes Model Notices for COBRA Subsidy

Filed under: COBRA — Tags: American Recovery and Reinvestment Act, COBRA, DOL — Jane @ 2:43 pm

The Department of Labor has just published Model Notices that can be used to help comply with the new COBRA subsidy requirements. They can be found at: http://www.dol.gov/ebsa/COBRAmodelnotice.html. You’ll notice that there are several notices available to be used depending upon the circumstances. Good luck navigating through them and figuring out what to do.

You’ll remember that the American Recovery and Reinvestment Act, signed on February 17^th, has increased employers’ COBRA obligations significantly. Additionally, very small employers not subject to the federal law, but who have comparable state “mini-COBRAs,” are also in for some big changes. The Act of 2009 requires immediate attention by most employers.

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February 19, 2009

COBRA Subsidy: Requires Immediate Action!!

Filed under: COBRA — Tags: COBRA, subsidy, terminated, termination, unemployment — Jane @ 6:00 am

The American Recovery and Reinvestment Act of 2009, signed on February 17th, (the massive federal“stimulus” legislation) includes an important provision that affects most employers and requires immediate attention. The new law will provide for a 65% monthly COBRA premium subsidy for most employees who were involuntarily terminated between September 1, 2008 and December 31, 2009. While the intent of the law is to assist employees who were terminated in reductions in force, it appears that nearly all involuntarily terminated employees and their dependents (qualified “assistance eligible individuals”) may qualify for the subsidy. The subsidy may extend up to 9 months and applies to medical, vision and dental benefits. It applies to nearly all employers with group health plans, regardless of whether they are subject to COBRA’s continuation rules. That includes private and government employers subject to COBRA and some smaller employers that may be subject to state “mini-COBRA” laws. “Assistance eligible individuals” are qualified for subsidy payments effective at the first period of coverage, beginning on or after the bill was signed into law (February 17th). Practically, for most employers, that date is March 1st .

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February 13, 2009

HR Fact Friday: House and Senate Agree on 60% COBRA Premium Subsidy

Filed under: COBRA — Paul @ 8:12 am

Reposted from www.workforce.com.

For anyone who has been laid off over the course of their career and considered continuing their employer provided healthcare coverage by utilizing COBRA, but quickly put the thought out of their heads because the cost was prohibitive, please read on . . .

House and Senate negotiators reached a final agreement Wednesday, February 11, on the massive stimulus bill, which is expected to receive final approval from the House and Senate by Friday.

The conferees’ agreement is similar to COBRA provisions approved by the Senate this week. Under that measure, the subsidy would have been 50% of the premium and it would have been available for up to 12 months.

The earlier House version called for a 65% premium subsidy up to 12 months. It also would have allowed employees with 10 years of service and those 55 and older to retain COBRA until eligible for Medicare, a potentially decades-long entitlement that business groups successfully fought to have removed.

According to a draft summary of the final compromise bill, the COBRA premium subsidy would not be available to individuals with an annual income exceeding $125,000 or to couples with annual incomes exceeding $250,000.

Like the earlier bills, the compromise measure would require employers to locate employees laid off since September 1, 2008, who declined COBRA to tell them they have a new right to opt for the coverage with the government picking up 60 percent of the premium.

Individuals would have 60 days after receiving the notification to sign up for the coverage. The subsidy would be prospective, applying to future premium payments.

Source: Jerry Geisel of Business Insurance, a sister publication of Workforce Management.

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