COBRA Subsidy Update for Employers, according to Barack Obama's New Plan

COBRA Subsidy Update for Employers, according to Barack Obama's New Plan

Background: Click here to visit the U.S Department of Labor's Website

COBRA gives workers who lose their jobs, and thus their health benefits, the right to purchase group health coverage provided by the plan under certain circumstances. If the employer continues to offer a group health plan, the employee and his/her family can retain their group health coverage for up to 18 months by paying group rates. The COBRA premium may be higher than what the individual was paying while employed but generally the cost is lower than that for private, individual health insurance coverage. The plan administrator must notify affected employees of their right to elect COBRA. The employee and his/her family each have 60 days to elect the COBRA coverage, otherwise they lose all rights to COBRA benefits.

Note: COBRA generally does not apply to plans sponsored by employers with less than 20 employees. Many States have similar requirements for small plans providing benefits through an insurance company. The premium reduction is available for plans covered by these State laws.

During my one hour webinar, I found that employers should be abreast on the most current information for this NEW employee Cobra benefit.
Key points:
1. Employers now have to offer any terminated employees, ((employees terminated as of September 2008 and forward (excluding certain provisions)) starting March 1, 2009, the NEW Cobra Subsidy program offerred by President Barack Obama. This benefit requires employers to continue paying 65% of the medical benefits of terminated employees for an extended period of time before their Cobra benefits actually start.
2. If an employee voluntarily leaves the company, they are NOT eligible for this benefit. Also, if an employee has a dependent who reaches the age of 19 and is included on their health insurance plan, they are also NOT eligible for this benefit, but still needs to be offerred the Cobra.
3. If an employee is unwillingly terminated (excluding certain provisions) they ARE eligible to receive this benefit and must be given the proper forms to complete.

Click here, to visit HNI's website for more information and webinars on this subject.

Your Friendly Neighborhood Accountant,
Patrice Blankenship
847-485-8565
Chicagobookkeepingservices@gmail.com
Visit my blog: http://www.chicagobookkeepingdataservices.blogspot.com