labor lawAdivision of labor law center

As daily readers of this blog know, the ARRA or American Recovery and Reinvestment Act of 2009 provides for extended COBRA coverage at reduced cost for many unemployed workers.

COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1985, permits employees to extend their group health insurance coverage for up to 18 months when they lose coverage due to unemployment, a reduction in hours, divorce, or similar circumstances. COBRA also applies to dependents who lose group health insurance coverage for similar reasons, or due to the employee’s death. Employees who are fired for gross misconduct are not eligible for COBRA coverage.

The big news is that ARRA allows employees to pay just 35% of their usual COBRA premium. It also gives eligible employees a special period to sign up for COBRA coverage. This COBRA premium reduction covers any worker who has lost their job between September 1, 2008 and December 31, 2009.

Under the COBRA Premium Reduction, the employee can pay just 35% of the usual COBRA premium. The employer pays the remaining 65% of the premium, and then takes a tax credit on the quarterly federal payroll taxes. In this way, the federal government is picking up the tab on 65% of the employees group health insurance premium, and there is no gap in healthcare coverage.  

The COBRA Premium Reduction under the 2009 stimulus package applies for a maximum of 9 months.

Employees who did not opt to take advantage of COBRA coverage have a second chance (more…)

The ARRA or American Recovery and Reinvestment Act of 2009 includes a special provision for continued healthcare coverage for unemployed workers under COBRA.

The COBRA subsidy means that many terminated workers will pay just 35% of their usual COBRA subsidy. The employer will pay the balance of the premium and take a tax credit on the quarterly payroll taxes. 

According to the latest U.S. Department of Labor COBRA Subsidy Fact Sheet, employers must conduct a special COBRA election period for qualified employees that lasts for 60 days. Notices about the special election period must be mailed to all eligible employees by April 17, 2009.

Individuals who were involuntarily terminated from September 1, 2008 through February 16, 2009 and did not elect to take COBRA coverage when it was offered, are eligible for the special election period. Workers who initially elected for the COBRA coverage but are no longer covered (perhaps because they have stopped paying the premiums) are (more…)

Many employers have questions regarding the COBRA subsidy under ARRA, the American Recovery and Reinvestment Act of 2009.

One of the key features under the ARRA is a 65% subsidy to provide COBRA continued healthcare coverage to the unemployed.

Employers need to realize that regulations are still being written for this law that went into effect on February 17, 2009. We will continue to update employers as new regulations are published.

COBRA, of course, is the Consolidated Omnibus Budget Reconciliation Act, a law that permits employees who have lost their jobs to continue their group insurance coverage for up to 18 months. COBRA also applies to dependents of ensured employees, and to employees who lose coverage because their hours have been reduced.

Only employers with 20 or more (more…)

The U.S. Department of Labor recently issued final rules under the Newborns’ and Mothers’ Health Protection Act of 1996. These new regulations take effect on December 19, 2008, according to a recent news bulletin by the SHRM, the Society of Human Resource Management.  The regulations apply to health insurance plans issued on or after January 1, 2009.

The rules were issued in conjunction with the U.S. Department of Health and Human Services and the Treasury Department. The rules apply to group health plans and health insurers, including businesses that are self-ensured.

The new U.S. Department of Labor rule extends the length of time mothers and newborn babies may stay in the hospital, following childbirth.

Under the “general rule”, employers or their healthcare plans cannot limit benefits for a hospital stay after a normal delivery to 48 hours. However, the employer or healthcare plan cannot restrict the hospital stay to a shorter period. In addition, employers can (more…)