Comments on: COBRA Facts: Premium Reduction

By: basusacobra

basusacobra — Sun, 27 Jun 2010 22:19:26 +0000

The regulation allows for the administrative fee, up to 2% of the premium, to be included as part of the 65% subsidy.

The information contained herein is for informational purposes only and is not intended as legal or tax advice, nor is it intended to advise you of your obligations under ERISA, COBRA, HIPAA or the American Recovery and Reinvestment Act of 2009. It should not be used or relied upon as the basis for any action or choosing inaction. Consult an experienced benefits attorney or tax professional about your specific situation before deciding on any course of action or inaction.

By: Joanne

Joanne — Wed, 24 Mar 2010 16:42:17 +0000

I am an employer who is paying the 65% of the previous employees COBRA payments. My question is we have an outside company that provides all the information for us to the ex employee and charges the ex employee an administrative fee. Currently the outside company is deducting the 65% that my agency owes on not only the monthly premium from the health insurance invoice but also on the administrative fee that they are charging the ex employee. For example my agency is paying 65% on, let’s say, $300 per month that it costs us to cover the ex employee plus 65% on the, let’s say, $7 per month administrative fee charged by the outside company. I don’t mind paying the 65% on the monthly premium, but is my agency responsible to pay 65% of the administrative fee also. I am paying 65% of it AND the ex employee is paying the full $7.00. Please let me know.

By: Harry Johnson

Harry Johnson — Sat, 27 Feb 2010 17:20:07 +0000

Any word yet on extending cobra to 24 months or if you’re 55 or older extending cobra until eligibility for medicare kicks in?

By: Sherry O'Dell

Sherry O'Dell — Fri, 11 Dec 2009 15:08:30 +0000

I am recently divorced (12/9/09 was date of final decree and qualifying life event change). I had been covered under husband’s group health insurance where he works, but he refused to carry me on his Cobra plan, so I have to do this on my own. Will I qualify for the premium reduction program, since I make less than $60k a year?

By: basusacobra

basusacobra — Fri, 23 Oct 2009 01:18:36 +0000

First, the subsidy is only available to employees who are Assistance Eligible Employees (see Q3 on our page: http://cobracontrol.com/regulations/economic-stimulus-bill-pre-presidential-signing/faqs-for-employers-about-cobra-premium-reduction-under-arra/). If you meet these eligibilty requirments, you your employer should bill you only 35% of the full monthly premium, and it is the employer who recovers the 65% of the premium, as explained in the instructions for the goverment’s Form 941 (see http://cobracontrol.files.wordpress.com/2009/02/i941instructions1.pdf for a copy).

The information contained herein is for informational purposes only and is not intended as legal advice, nor is it intended to advise you of your obligations under ERISA, COBRA, HIPAA or the American Recovery and Reinvestment Act of 2009.

By: Mark Welch

Mark Welch — Thu, 22 Oct 2009 22:14:13 +0000

How does one apply for the subsidy? My employer knows nothing about it and I am just now setting up my COBRA insurance extension.

thanks
Mark

By: basusacobra

basusacobra — Wed, 19 Aug 2009 22:20:43 +0000

To be eligible for COBRA, amonth other things (e.g., employer is subject to COBRA), the reduction in hours must result in a loss of COBRA-qualified coverage (e.g., medical, dental, vision, pescription, or FSA).

The information contained herein is for informational purposes only and is not intended as legal or tax advice, nor is it intended to advise you of your obligations under ERISA, COBRA, HIPAA, a State’s “Mini-COBRA,” or the American Recovery and Reinvestment Act of 2009. It should not be used or relied upon as the basis for any action or choosing inaction. Consult an experienced benefits attorney or tax professional about your specific situation before deciding on any course of action or inaction.

By: basusacobra

basusacobra — Wed, 27 May 2009 15:34:31 +0000

IRS Notice 2009-27 (a copy is available on this blog’s left menu system) provides the following Q&:

Q-4. Does involuntary termination include an employer’s action to end an
individual’s employment while the individual is absent from work due to illness or
disability?
A-4. Yes. Involuntary termination occurs when the employer takes action to
end the individual’s employment status (but mere absence from work due to illness or
disability before the employer has taken action.

Therefore, if you as the employer have not terminated the employees employment or they have not given you notice, then they are not eligible for COBRA, and thus not eligible for a premum subsidy. If you terminate the employee’s employment, this would be an involuntary separation and the would be eligible for the premium subsidy. If the employee gives you notice they are terminating their employeent with your firm, then this would be a voluntary separation and not eligible for the premium subsidy. Please check with your counse to confirm this information before taking any action.

By: Heather Whitehawk

Heather Whitehawk — Tue, 26 May 2009 22:30:29 +0000

If an employee claims to be injured by a Workman’s Compensation Injury, and the Co. is disputing the WC Injury, is the employee eligible for the 35% reduction of COBRA benefits?

By: basusacobra

basusacobra — Fri, 22 May 2009 03:11:02 +0000

It seems that such termination would be “involuntary” because the Opera Studio made the discretionary and unilateral decision to terminate employment regardless of the type of employment contract. From our understanding of the COBRA regulations, length of an employment contract is not a mitigating element in determining COBRA eligibility. Don’t let the “length of the employment contract” foul you up in determining loss of coverage. Think of it this way: did the employee have COBTA-eligible benefits (e.g., medical, dental, etc.), and, if so, did the employee lose coverage by the employer terminating employment?