Tuesday, March 31, 2009

COBRA and Stimulus Package

I mentioned that under the COBRA provisions in the stimulus bill small business will have some additional obligations for employees that have been involuntarily terminated. I have received additional information since that email and would like to pass it on to you.
First this will not only apply to Federal COBRA but state COBRA so if you had two or more employees from September 2008 and have laid off employees you will need to notify those employees that they are eligible for a 65% subsidy on their insurance. This notification provision will be required until Jan 1 2010.
If you have 20 or more employees and your employees have opted for COBRA you will be required to advance 65% of the premium and then submit to the Government for reimbursement. When you submit your request to the Government you will need to file a report that includes and attestation of the involuntary termination of the covered employee, the calculation of the offset, a report of estimated offsets for the next reporting period, the TINs of covered employees, the amount of the subsidy to each individual and information as to whether the subsidy provided was for individual or family coverage.
If you have 2 to 19 employees your insurance company is probably billing the exemployee. Needless to say insurance companies are scrambling right now to figure out how they will do this especially given the required information that they must provide to receive reimbursement.
Another provision you should be aware of is that exemployees will have a second chance to take up this COBRA option so in effect it seems to me that if you have laid off employees you will need to advise them of this option.
If you want more detailed information please look on our homepage at www.smallbusinesscalifornia.org

Scott HaugePresidentSmall Business California2311 Taraval StreetSan Francisco, CA 94116shauge@cal-insure.com415-680-2188


Angela H. said...

Hello - I just called my Cobra and they are refusing insurance reimbursement bs "California is STILL VOTING on this bill" so this hasn't cleared for California. I am disappointed bs they said that I would be mailed an official letter by 18th of April with new stimulus law eligibility notice, and now they are "Unclear on the date, because only FEDERAL, not state law has cleared this". Please comment. Where can I find out if the new bill has been passed in California? I am definitely eligible! Is California cheating us out of it???

Angela H. said...

OK I am going to add to what was said. The California bill is called AB 23 and it went from Karen Bass assembly committee analysis (which went through numerous amendments) to the Senate which is scheduled for a vote on the 4/27/09. Here's the link on its progress: http://www.aroundthecapitol.com/Bills/ab_23

jb said...

IF you are in the market to buy and sell a business try the free site from www.bizcloud.net to connect whit 20 milion business owners and promote your small business online. Also, you can read the tips in buying and selling a business or participate in the business blog on this amazing site.