My employer is telling me that he will pay for my insurance for another 2 months, even though I am about to be laid off because of company downsizing. Is this legal?
Total Comments: 7
Posted: Tue Oct 26, 2010 05:36 pm Post Subject:
Your insurer can pay or not. It's entirely voluntary on their part. However, if your employer had 20 or more employees before you were terminated, you may be eligible to continue the group coverage at your expense.
if you elect continuation under COBRA, current legislation requires your employer to pay 65% of the cost, you pay 35%-37% (you can be required to pay up to 102% of the actual expense). Your continuation period would be up to 18 months from the date of termination.
Posted: Wed Oct 27, 2010 12:36 am Post Subject:
I believe the COBRA subsidy has ended effective the end of May this year and I don't believe Congress extended or reauthorized the subsidy. If I'm off on this, please let me know.
So, it looks as if the entire COBRA premium is now on the beneficiary. Bummer.
InsTeacher 8)
Posted: Wed Oct 27, 2010 02:54 am Post Subject:
InsTeacher is correct, the subsidy "ended" effective May 31, except that Congress passed a stop-gap measure that allowed a person who waited until June 30 to continue effective July 1 to be swept into the subsidy program. I misunderstood that as an extension of the subsidy along with the extension granted to unemployment insurance recipients.
After doing a bit of research, the reason the COBRA subsidy failed to be extended was the dispute in Congress over how the measure would be funded. Democrats wanted to continue selling BONDS to the world, increasing the national debt. Republicans wanted to use existing allocated (but unspent) Recovery Act money to pay for it.
There's a possibility that they may resurrect the subsidy legislation after the elections, in the lame duck session, but no one is holding their breath.
Sorry for the misinformation in the post above. While COBRA continuation itself has not been affected, the cost is 100% that of the "qualified beneficiary".
Posted: Wed Oct 27, 2010 06:26 am Post Subject:
if you elect continuation under COBRA, current legislation requires your employer to pay 65% of the cost, you pay 35%-37% (you can be required to pay up to 102% of the actual expense).
The individual paying 35% does not mean that the employer is paying 65%.
Posted: Wed Oct 27, 2010 12:19 pm Post Subject:
The individual paying 35% does not mean that the employer is paying 65%.
For those persons who are currently having their COBRA continuation payments subsidized, it most certainly is the employer who pays the other 65% to the insurance company -- there is no other party responsible for the payment of premiums (well, there could be a TPA acting on behalf of the employer, but it's still the same thing). Then the employer receives a credit against his quarterly payroll taxes for the amount of COBRA subsidy he provides.
Where else would the 65% of premium come from? Or do you think the employer is receiving some sort of "discount" from the insurance company? That would be unlawful.
Posted: Wed Oct 27, 2010 08:44 pm Post Subject:
The employer may be fronting the money, but it is the Federal Government (ie. the taxpayers) who is paying the premium.
The employer is in the exact same financial position with or without the Cobra subsidy, but the Government loses that amount of money in tax revenues.
Posted: Wed Oct 27, 2010 10:04 pm Post Subject:
The 65% comes from the tax payers. The government is paying for it.
The way that they are paying for it is having employers lay out the money and then reimbursing them for the expenditure. The mechanism is the payroll tax credit.
The end result is that employer's don't pay anything for this.
Posted: Tue Oct 26, 2010 05:36 pm Post Subject:
Your insurer can pay or not. It's entirely voluntary on their part. However, if your employer had 20 or more employees before you were terminated, you may be eligible to continue the group coverage at your expense.
if you elect continuation under COBRA, current legislation requires your employer to pay 65% of the cost, you pay 35%-37% (you can be required to pay up to 102% of the actual expense). Your continuation period would be up to 18 months from the date of termination.
Posted: Wed Oct 27, 2010 12:36 am Post Subject:
I believe the COBRA subsidy has ended effective the end of May this year and I don't believe Congress extended or reauthorized the subsidy. If I'm off on this, please let me know.
So, it looks as if the entire COBRA premium is now on the beneficiary. Bummer.
InsTeacher 8)
Posted: Wed Oct 27, 2010 02:54 am Post Subject:
InsTeacher is correct, the subsidy "ended" effective May 31, except that Congress passed a stop-gap measure that allowed a person who waited until June 30 to continue effective July 1 to be swept into the subsidy program. I misunderstood that as an extension of the subsidy along with the extension granted to unemployment insurance recipients.
After doing a bit of research, the reason the COBRA subsidy failed to be extended was the dispute in Congress over how the measure would be funded. Democrats wanted to continue selling BONDS to the world, increasing the national debt. Republicans wanted to use existing allocated (but unspent) Recovery Act money to pay for it.
There's a possibility that they may resurrect the subsidy legislation after the elections, in the lame duck session, but no one is holding their breath.
Sorry for the misinformation in the post above. While COBRA continuation itself has not been affected, the cost is 100% that of the "qualified beneficiary".
Posted: Wed Oct 27, 2010 06:26 am Post Subject:
if you elect continuation under COBRA, current legislation requires your employer to pay 65% of the cost, you pay 35%-37% (you can be required to pay up to 102% of the actual expense).
The individual paying 35% does not mean that the employer is paying 65%.
Posted: Wed Oct 27, 2010 12:19 pm Post Subject:
The individual paying 35% does not mean that the employer is paying 65%.
For those persons who are currently having their COBRA continuation payments subsidized, it most certainly is the employer who pays the other 65% to the insurance company -- there is no other party responsible for the payment of premiums (well, there could be a TPA acting on behalf of the employer, but it's still the same thing). Then the employer receives a credit against his quarterly payroll taxes for the amount of COBRA subsidy he provides.
Where else would the 65% of premium come from? Or do you think the employer is receiving some sort of "discount" from the insurance company? That would be unlawful.
Posted: Wed Oct 27, 2010 08:44 pm Post Subject:
The employer may be fronting the money, but it is the Federal Government (ie. the taxpayers) who is paying the premium.
The employer is in the exact same financial position with or without the Cobra subsidy, but the Government loses that amount of money in tax revenues.
Posted: Wed Oct 27, 2010 10:04 pm Post Subject:
The 65% comes from the tax payers. The government is paying for it.
The way that they are paying for it is having employers lay out the money and then reimbursing them for the expenditure. The mechanism is the payroll tax credit.
The end result is that employer's don't pay anything for this.
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