labor lawAdivision of labor law center

The 2009 COBRA Premium Reduction under the ARRA affects millions of laid-off workers, and employers are being deluged with questions on it. Here are some answers to the most frequent questions.

COBRA, the Consolidated Omnibus Budget Reconciliation Act, permits employees to extend their group health insurance after being laid off or terminated. The COBRA Subsidy reduces premiums for workers who are out of work, though no fault of their own. COBRA regulations are issued through the U.S. Department of Labor.

How much is the COBRA premium reduction?

The COBRA premium reduction is 65%, meaning that the federal government picks up 65% of the tab, while the employee pays just 35% of the usual COBRA premium.

When should employees be notified of the COBRA Premium Reduction? Employees laid off between September 1, 2008 and February 17, 2009 must be informed in writing of the premium reduction by April 17, 2009.  Employees then have 60 days after receiving notice to opt to sign up for COBRA under the reduced premium.

Employees who are terminated between February 17, 2009 and December 31, 2009 must be notified of COBRA within 60 days, just as usual. However, that notification will include the reduced premium.

Any laid-off worker who has not received notification at this point, should contact both the previous employer and the insurance administrator.

Can employees who initially declined COBRA sign up now, with the reduced premium?

Yes, an employee who was terminated between September 1, 2008 and February 17, 2009 can sign up for COBRA with reduced premiums during the special election period. This is true, even if the employee initially declined COBRA coverage when terminated.

How long does the COBRA Premium Reduction last? (more…)

The COBRA subsidy is one of the most notable features of the ARRA or American Recovery and Reinvestment Act signed into law on February 17, 2009. 

The employee will pay just 35% of the usual COBRA premium. Under this plan, employees who lose healthcare coverage due to terminate will qualify for a 65% government subsidy on continued group insurance coverage under COBRA.

A new U.S. Department of Labor COBRA subsidy fact sheet outlines this program.

Under this program, the employer still pays the entire healthcare premium to the insurance company. The employer can then deduct 65% of the total premium from his or her payroll taxes.

Suppose a former employee of the XYZ Corp. normally pays $900 for COBRA coverage. Under the ARRA COBRA subsidy, the employee pays 35% of that amount, (more…)

Many employers struggle to understand the new EEOC definition of disability under the ADA, the Americans with Disabilities Act.

The ADAAA or ADA Amendments Act of 2008, significantly increases the number of employees who are considered disabled under the ADA. In fact, some estimates are that the ADAAA has tripled the number of “disabled” employees, simply by changing the definition of disabled.

In fact, according to SHRM, the Society for Human Resource Management, the majority of employees over the age of 50 may now be covered under ADA. That is because all that is required under the new regulations is that the individual have some deterioration in their body, and most individuals over 50 have such deterioration.

The new definition of disabled includes individuals (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…)

The U.S. Department of Labor recently issued regulations concerning the use of military leave and expanded FMLA leave for military caregivers.

Speaking on the release, Labor Secretary Elaine L. Chao said, “This final rule, for the first time, gives America’s military families special job-protected leave rights to care for brave service men and women who are wounded or injured, and also helps families of members of the National Guard and Reserves manage their affairs when their service member is called up for active duty.” The Secretary added, “At the same time, the final rule provides needed clarity about general FMLA rights and obligations for both workers and employers.”

The new regulations expand the qualifying family members, for military leave purposes. Traditionally, the FMLA or Family and Medical Leave Act has defined an “immediate family member” as a son or daughter, parent or spouse. Sons and daughters were covered only if they were under the age of 18, or unable to care for themselves. Under the military family leave provision of (more…)