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FYI: New COBRA Premium Subsidy Changes

By Cindy Van Bogaert
March 4, 2010

Here is your latest FYI: Employee Benefits Update from Cindy Van Bogaert, Partner and Chair of the Employee Benefits Practice Group at Boardman Law Firm LLP. This FYI addresses a new COBRA premium subsidy extension.

On March 2, the Temporary Extension Act of 2010 became law. The new law provides an extension of the COBRA premium subsidy. The Department of Labor website provides the following information: "Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee's employment. The involuntary termination must generally occur during the period that began September 1, 2008 and ends on March 31, 2010. (An involuntary termination of employment that occurs on or after March 2, 2010 and follows a qualifying event that was a reduction of hours and that occurred at any time from September 1, 2008 through March 31, 2010 is also a qualifying event for purposes of [the 2009 stimulus law].) The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months." See http://www.dol.gov/ebsa/cobra.html. The Department of Labor website includes a link to the law which has more information and changes.

What should employers do?

  • Determine what steps are needed to comply with this new law, including notifications to plan participants. New guidance is expected.

Please contact me if I can be of assistance.

Upcoming seminars:

  • "HIPAA Portability, Privacy & Security," for the Employee Benefits Institute of America in Baltimore, MD on April 22, 2010. For information: http://www.ebia.com/Seminars/InPerson.
  • "HIPAA Privacy Heats Up," at the Midwest Claims Conference in Lake Geneva, WI on May 6, 2010.
  • "Fiduciary Responsibility," at Wisconsin Retirement Plan Professionals, Ltd in Milwaukee, WI on May 27, 2010. For contact information: http://wrppl.org/Home/tabid/88/Default.aspx.
  • "HIPAA Privacy: Tougher Rules; Tougher Enforcement," at the Society for Human Resource Management (SHRM) Annual Conference & Exposition in San Diego, CA on June 28, 2010. For information and to register: http://www.shrm.org/CONFERENCES/annual/Pages/default.aspx.
  • "401(k) Plans" Seminar in Madison, WI soon to be scheduled in September, 2010, contact Nick Sayers at (608) 283-7577.
  • "HIPAA Training" covering the basics and new developments such as HITECH on October 26, 2010, contact Nick Sayers at (608) 283-7577. If you work with employer health benefits, you should consider this training seminar to meet your legal obligations.

This FYI is not legal advice. Individuals should seek advice based on their particular circumstances from their own counsel.

If you have any questions or need assistance, please contact Cindy Van Bogaert at (608) 283-7543 or Email.

Would you like to have FYI: Employee Benefits Update sent directly to your e-mail inbox? If so, please send your request, with e-mail address, to Cindy Van Bogaert at Email.