February 12, 2009 - Conference Committee Agree on COBRA premium subsidy
Employees who are laid off between Sept. 1, 2008, and Dec. 31, 2009, would be eligible for a 60% federal subsidy for up to nine months of COBRA health insurance premiums under economic stimulus legislation nearing final congressional approval.
House and Senate reached a final agreement Wednesday on the massive stimulus bill, which is expected to receive final approval by the House and Senate by Friday.
The conferees’ agreement is similar to COBRA provisions approved by the Senate earlier this week. Under that measure, the subsidy would have been 50% of the premium and it would have been available up to 12 months.
The earlier House version called for a 65% premium subsidy up to 12 months. It also would have allowed employees with 10 years of service and those 55 and older to retain COBRA until eligible for Medicare, a potentially decades-long entitlement that business groups successfully fought to have removed.
According to a draft summary of the final compromise bill, the COBRA premium subsidy would not be available to individuals with an annual income exceeding $125,000 or to couples with annual incomes exceeding $250,000.
Like the earlier bills, the compromise measure would require employers to locate employees laid off since Sept. 1, 2008, who declined COBRA to tell them they have a new right to opt for the coverage with the government picking up 60% of the premium.
Individuals would have 60 days after receiving the notification to sign up for the coverage. The subsidy would be prospective, applying to future premium payments.
HR Simplified is preparing to make a smooth transition to the new COBRA requirements for our clients. We are monitoring the process closely and working with our software vendor to ensure full compliance by the required deadlines.
HR Simplified will keep you updated as this bill approaches becoming law