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Stimulus Package Provides New COBRA Subsidies The following article was taken from information provided by Stephens Insurance, LLC: Effective March 1, Title III of the American Recovery and Reinvestment Act of 2009 (the Stimulus Package), expands the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) Continuation Coverage to provide a 65% federal subsidy toward an eligible worker's COBRA premium for up to nine months. Individuals who pay 35% of their regular COBRA premiums are treated as having paid the entire premium amount. This applies only to the group health plan, not an FSA that is normally covered under COBRA. The employer is then required to pay the additional 65% of the premium and seek reimbursement from the government in the form of a credit on the payroll taxes owed by the employer. In order to be eligible for the subsidy, an individual must have been involuntarily terminated between September 1, 2008, and December 31, 2009, and must have been a plan participant prior to termination. The subsidy is only available for involuntary terminations, so other COBRA qualifying events such as voluntary termination or divorce will not create an entitlement to the subsidy. In addition, the individual must affirmatively elect such coverage after the required notifications. The Act provides a new extension of election period for those individuals who would be eligible for assistance if they had previously elected COBRA coverage. Those individuals can elect COBRA coverage anytime after the date of the enactment of the Stimulus Act up until the conclusion of the 60-day period following the date they receive a new written notification from their employer detailing the provisions of the COBRA subsidy. Certain high-income individuals are not eligible for the subsidy. If an individual has an adjusted gross income of $125,000 or more for a taxable year ($250,000 for families), that person is not eligible. In the event that an individual becomes eligible for coverage under another group health plan or Medicare, his or her entitlement to the subsidy ends on the first date the individual could be covered under the new plan. House Leadership Continues Search for Health Insurance Funding House Speaker Robbie Wills, D-Conway, Rep. Bill Abernathy, D-Mena and Rep. Bruce Maloch, D-Magnolia continue to search for funds to bolster the insurance program for public school active and retired employees. Towards the end of the week, they will meet with Gov. Mike Beebe and the governor's staff to see if any help can be found within the Stimulus Package. |
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