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…)

Several features of the $780 billion stimulus plan passed this week will affect how Human Resources professionals perform their jobs in 2009 and beyond.

The goal of the law signed by President Barack Obama on February 17, 2009 is to save or create more than 3 million jobs. The bill, H.R. 1, was developed jointly by the House and Senate.

During negotiation, members of the House and Senate removed all mention of the federal government’s E-Verify system. The initial bill passed in the House would have required that any business receiving funds from the federal government under the stimulus bill use that system to verify that all employees are legally authorized to work in the U.S., using that system.

E-Verify is still required by many states and local governments, and is free to all private employers in the country. All federal contractors will be required to implement E-Verify later this year.

In addition, the stimulus bill requires that any employer receiving aid hire U.S. workers who have been laid off before recruiting and hiring workers from other countries on H-1B visas. This measure is expected to have the biggest impact on IT employees. (more…)