Yesterday, February 17, 2009, President Obama signed the broad stimulus legislation known as the American Recovery and Reinvestment Act of 2009 (ARRA) which includes, among other employee benefit plan enhancements, significant changes for employers regarding how they administer COBRA. Many of the changes need to be implemented by March 1, 2009.
HOW DOES THIS AFFECT YOU AS AN EMPLOYER?
In general, the ARRA provisions change COBRA as follows:
- The government will provide a COBRA Subsidy for individuals who recently lost health coverage
- A second chance for individuals to elect COBRA for those who recently declined
- The ability to allow a COBRA participant to change to a lower-cost healthcare plan (if you as an employer offer more than one health plan)
- The Employment Tax Offset for COBRA Subsidy address how employers and participants take advantage of the subsidy
Additionally, the ARRA also provides a change/enhancement to the following areas:
- An increase in the Transit Pass Limit to $230 to match the Parking Limit for Commuter Benefit Plans
- Expanding the definition of HIPAA Privacy and Security to include other types of businesses and to promote the use of Health Information Technology and the use of electronic records
- Health Coverage Tax Credit (HCTC) provided to specific groups of individuals
Starting March 1, 2009, it will be necessary to make employees aware of the increase to $230 of Transit passes as well sending out new COBRA notices and inserts as required to be sent to assistance-eligible individuals and existing COBRA participants.
Additionally, to manage the Federal subsidy you will need to have a way of tracking the total COBRA premiums less the subsidy. This tracking report will be used to calculate how much to reduce your employment taxes.
WHAT SHOULD I DO NEXT?
For those of you who currently outsource COBRA administration, your COBRA vendor should handle these necessary requirements for you. However, if you are still administering COBRA yourself, it is expected that the Department of Labor (DOL), the Treasury Department, and The Department, of Health and Human Services (HHS) will be issuing other guidance and regulations as well as model notices in the coming weeks.
For detailed information regarding specifics associated with how to determine eligibility and required time frames, we’ve prepared, together with Infinisource (our preferred COBRA administrator), a comprehensive overview for you. CLICK HERE for document.
Rest assured your CSG staff is being trained about this new legislation and will be a resource for you in the coming weeks to address your questions. We plan on making available to you a teleconference and/or webinar to answer many of the questions surrounding these changes.
If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or click here to contact us today. |
