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Labor & Employment Law

: Employment Advisory

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Correction to Cobra Bites Post

Last week I posted an update on the legislative changes to COBRA that are part of the economic stimulus package. In that post I indicated that individuals that paid for COBRA at the full rate since September 1, 2008 would be able to receive a reimbursement for 65% of the premiums paid since under the terms of the new legislation they are "assistance eligible individuals." One of my readers, anonymous, told me I was wrong about this since the legislation speaks of subsidizing premium payments from the date it is sign (2/17/09) forward. I responded that I didn't think that was the case since the definition of an assistance eligible individual is someone who was involuntarily let go on or after September 1, 2008 and before January 1, 2009. I felt the legislation was not clear on the issue and, let's be honest, I just couldn't accept that a person who found a way to pay the premium between September 1, 2008 and February 17, 2009 should be penalized. I mean, hey, this is an economic stimulus package after all and if you reimburse an assistance eligible individual for past premiums, then they will use that money to stimulate the economy. Well, I was wrong. I just found the following on the Department of Labor website:

The premium reduction provisions relate only to premiums for coverage periods beginning after the new law was enacted on February 17, 2009. The law does not allow reimbursement of premiums for coverage periods beginning before February 17, 2009. Qualified individuals can, however, receive the premium subsidy going forward, for up to nine months.
Your plan administrator should provide to you a notice of your right to apply for the premium reduction. You may also want to contact your employer directly to ask about getting the premium reduction and how to reconcile any amounts you might have overpaid after February 17, 2009.

So there you have it. I stand corrected and thanks for the heads up Anonymous. In the meantime, I will keep you up to date on additional information I learn about COBRA.

Take care,

Rod

Full post as published by Employment Advisory on February 24, 2009 (boomark / email).