Archive for the ‘COBRA’ Category

As some of you may be aware, in April, Congress passed a retroactive 2 month extension of federal unemployment insurance programs and a two month of extension of time to qualify for the COBRA subsidy. These programs expire however at the end of this month.

Probably on Wednesday, the House of Representatives will be take up a bill that would extend Unemployment Insurance and COBRA through the end of December 2010. There will be fierce debates over whether to approve this extension based upon the cost of the bill and the claims that it will add to our federal deficit. As if this extension of benefits would even marginally impact our federal deficit….LOL.

Needless to say, the persons who oppose this bill are short sighted. Even if you don’t personally need the relief, if it is given to others, it helps support your community and probably will keep the foreclosure crisis from getting worse than it is.

Please contact your Congresspersons this week and let them know that this relief needs to be supported to help out all for the workers of this country. You can call the Capital switchboard at (202) 224-3121 and they will put you through to the right office. Tell them that you demand that they vote in favor of extending unemployment and COBRA benefits through the end of the year.

If you wish to click on a link that will allow you to e-mail the appropriate representative from your district go to http://www.nelp.org/page/speakout/BenefitsNOW. This is a link by the National Employment Law Project.

Share

So yesterday I discussed COBRA benefits, when they are generally available and the applicable time frames. You also need to be aware of recent legislation affecting the amount and duration of your COBRA benefits.

The Obama Administration passed the American Recovery and Reinvestment Act (“ARRA”) of 2009 which provided expanded rights under COBRA. ARRA gave employees (and their dependents) who were involuntarily terminated from employment between September 1, 2008 and December 31, 2009 the right to elect COBRA coverage and pay only 35% of the COBRA premium. Under ARRA, the subsidy was limited to a total of 9 months.

Since the enactment of ARRA, the subsidy period has been extended twice to include employees involuntarily terminated through March 31, 2010 and the length of the subsidy has been increased from 9 to 15 months. On April 15, 2010, Congress passed the Continuing Extension Act of 2010 (“Act”) and the White House is reporting that it was signed by the President on the same day. The Act again extends the subsidy, this time to employees who are involuntarily terminated through May 31, 2010. The Act also provides transition relief to individuals who lost their jobs between March 31, 2010 and the date of enactment. The subsidy still remains capped at 15 months.

So make sure when determining how much COBRA premium you are required to pay and how long you are entitled to receive COBRA that you either check with your Human Resources department or an experienced employment law attorney.

Share

In today’s business environment, with so many people losing their jobs, one big concern of people is what are their rights to continue benefits such as health insurance under COBRA. So this post is intended to give you some information on COBRA, who it applies to and how it works.

For all those interested COBRA refers to the Consolidated Omnibus Reconciliation Act. COBRA was passed in 1986 and provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

In order for your employer to be subject to COBRA, they must have had at least twenty employees on more than 50 percent of it business days in the prior calendar year. Both part time and full time employees are used to calculate this, two part time employees count as one full time employee. Even if your employer was not subject to COBRA, many states, such as the State of Florida have similar benefit continuation statutes that apply to smaller employers.

You are entitled to COBRA coverage if you are a covered employee or the spouse or dependent child of the covered employee and a qualifying event as follows took place:

Qualifying Events for Employees:

Voluntary or involuntary termination of employment for reasons other than gross misconduct
Reduction in the number of hours of employment

Qualifying Events for Spouses:

Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct
Reduction in the hours worked by the covered employee
Covered employee’s becoming entitled to Medicare
Divorce or legal separation of the covered employee
Death of the covered employee

Qualifying Events for Dependent Children:

Loss of dependent child status under the plan rules
Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct
Reduction in the hours worked by the covered employee
Covered employee’s becoming entitled to Medicare
Divorce or legal separation of the covered employee
Death of the covered employee

Employers must notify the group health insurer or provider of benefits of a qualifying event within 30 days after an employee’s death, termination, reduced hours of employment or entitlement to Medicare.

A person entitled to benefits under the group insurance must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation or a child’s ceasing to be covered as a dependent under plan rules.

In the event of a COBRA qualifying event, you generally must be sent an election notice not later than 14 days after the insurance company or plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.

Once you elect to COBRA coverage, you are entitled to COBRA benefits for up to 18 months. However some employers may elect to allow COBRA coverage for longer than 18 months.

Remember that you can only get COBRA benefits if your former employer continues to operate the group insurance plan. So if you employer shuts down and has not more insurance plan, they are not required to furnish COBRA benefits.

If you do not got the required COBRA notices from your former employer, there are civil actions that can be brought where you are entitled to damages for each day they are late in delivering your COBRA notice and this statute also provides for recovery of attorneys’ fees.

Since COBRA is a complicated area that has some new rules that have been effected by the Obama administration, I will continue to provide some more information on COBRA tomorrow.

Share
Search
Categories
Links: