SCDA Member Benefits Alert 
COBRA
April 20, 2010
Greetings!  
 
COBRA/Continuation Subsidy Eligibility Extended Yet Again

Another extension to the COBRA/Continuation premium subsidy was passed in Washington to cover anyone who is involuntarily terminated from employment through May 31. Anyone who qualifies can continue their medical benefits at 35% of the cost. As a reminder, below are the responsibilities of employers depending upon the size of your practice.

For Continuation eligible practices (those employers with less than 20 employees) the insurance carrier must eat the other 65% of the premiums the employee is not responsible for. The maximum amount of time the benefits can be kept after termination from employment is 6 months.
 
For COBRA eligible practices (those who have 20 or more employees) the onus falls on the employer to cover the 65% the employee is not responsible for. You can then recoup those monies from the government at tax time. The subsidy last for 15 months with an employee option to keep the benefits for an additional 3 months thereafter, but at 100% cost to the employee.
 
This subsidy also applies to employees whose work hours have been reduced to part time therefore causing them to no longer be eligible for medical benefits. 
 
This subsidy does not apply to anyone who voluntarily quits or who is fired for "gross misconduct."
 
Employers have 60 days to issue COBRA/Continuation notices to affected employees.
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Mark Brown
SCDA Member Benefits Group Manager