The COBRA Subsidy is Coming
Published March 2009
As you may know, the American Recovery and Reinvestment Act of 2009 (ARRA, a.k.a. the Economic Stimulus Package) offers a 65% COBRA subsidy for up to 9 months to employees who lose their jobs between 9/1/2008 and 12/31/2009 and meet other eligibility requirements. The purpose of the COBRA subsidy within ARRA is to provide affordable health insurance to those that have been involuntarily terminated from their employment.
Individuals need this financial assistance and want to know why they can’t begin paying the reduced premium amounts just yet. The COBRA subsidy was planned to take effect with the first premiums due after 2/17/2009 however the industry is waiting for the Department of Labor (DOL) to complete the groundwork for the subsidy, including how to interpret and administer the COBRA subsidy. The experts BASIC has been consulting with have advised the same. This guidance from the DOL includes providing model notices to be sent to COBRA qualifiers and those eligible for the COBRA special election notice. This guidance is expected on or around 3/19/2009. Once this guidance is provided, then we can all begin the process of offering the COBRA subsidy.
At that time, we will be providing a COBRA Subsidy Q&A that will answer many of the questions from our recent COBRA subsidy webinar, which was highly attended with over 750 participants. Our next COBRA Subsidy webinar is on March 26, presented by Larry Grudzien. Please click here to register for this webinar. Please note that we have less than 300 seats available before we reach our 1,000 seat maximum.
We understand our clients have many questions regarding the COBRA subsidy because many aspects of the subsidy are still unfolding as to exactly how it should be administered. BASIC is working diligently to clarify and prepare for administrative aspects for the COBRA subsidy. BASIC is dedicated to leading our clients through this new process of compliance for ARRA COBRA subsidies. In the meantime, please contact us if you have questions.
More information: Here is a link to an informative article explaining why it is taking time to rollout the COBRA subsidy:
- IRS COBRA Subsidy Notice: http://www.irs.gov/newsroom/article/0,,id=204709,00.html
- IRS COBRA Subsidy Webpage: http://www.irs.gov/newsroom/article/0,,id=204505,00.html
(with links to Q&A, Form 941 and instructions)
- The Department of Labor: http://www.dol.gov/ebsa/COBRA.html
- IFEBP (International Foundation of Employee Benefit Plans): http://www.ifebp.org/Resources/News/Regulatory Updates/ AmericanRecoveryandReinvestmentBillIncludesCOBRAChanges.htm