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- The American Recovery and Reinvestment Act of 2009 (ARRA) - otherwise known as the stimulus plan has some provisions that require immediate action for employers that are COBRA eligible and have had involuntary terminations since 9/1/08. The Act is expected to be signed into law this week. The basics of the act that apply to COBRA are below:
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- COBRA Subsidy - Eligible workers will receive a 65 percent subsidy toward their health care coverage premium for up to 9 months. The Treasury Department will administer the subsidy, providing employers or health plans, if they administer COBRA benefits, to receive a credit against payroll taxes for the cost of the subsidy. The subsidy would terminate upon offer of any new employer�sponsored health care coverage or Medicare eligibility.
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- Employee Eligibility - Individuals who have been involuntarily terminated between September 1, 2008 and December 31, 2009 with annual incomes less than $125,000 (single) or $250,000 (couples) are eligible for the COBRA premium assistance, along with their family. Qualified individuals, who initially decline COBRA coverage, would be given an additional 60 days after they receive notice of the special election period to elect to receive the subsidy. The election period begins on the date of enactment of the ARRA.
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- Special Enrollment - The bill allows group health plans to provide a special enrollment right to allow eligible individuals to elect different coverage under the plan in electing COBRA continuation coverage.
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- Notice Requirements - COBRA notices must include information on the availability of the premium assistance. Model notices from the Department of Labor are due 30 days after enactment.
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- Effective Date - These provisions are effective for premiums the first calendar month following the date of enactment.lendar month following the date of enactment.
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- The first step is to identify if you have any former employees that may be eligible. If you have not had any involuntary terminations, then it does not apply
retro-actively. Next, the details for the various administration questions are not yet available. Please let us know your circumstances so that we may investigate any particulars that apply to your organization.
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