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COBRA and Health Care Reform
With all the upheaval regarding Health Care Reform, COBRA is still an important option for millions of workers and their families. Contrary to what many predicted, not only did the new health care reform law refrain from eliminating COBRA, it did not change any of the rules. In fact, Congress is still working on COBRA provisions which would expand its realm and make it an even more integral part of the health care reform equation.
The following are some interesting COBRA statistics from the recent Commonwealth Fund Brief survey:
- An estimated 15 million working age adults lost their jobs and health benefits from 2008 through 2010.
- 25% of adults were able to go on their spouse’s insurance policy or find other coverage; however, 14% continued their coverage through COBRA.
- Nearly three quarters (72 %) of respondents who became uninsured skipped a recommended medical treatment or follow-up test; did not get a specialist or other physician care when needed or fill a prescription.
- By comparison, 42 percent who remained insured even after losing their job and health benefits experienced just one of the above problems.
- Nearly three quarters (72 percent) of workers who became uninsured when they lost their job reported at least one problem with medical bills or accrued medical debt compared with 49 percent of adults who remained insured after losing their job and health benefits.
- In 2010, 58 percent of workers, or about 67 million people, would likely have been eligible for COBRA if they had lost their job and health care.
- Unemployed workers with COBRA coverage averaged annual premium costs of $5,049 for an individual plan and $13,770 for a family plan based on employer plan costs in 2010.
AZ USA: Wednesday, January 04 - 2012
2011 Cafeteria Plan Manager Software is Available
The Cafeteria Plan Manager software has been updated for 2011. Two significant changes are introduced in 2011 which impact how you administer your cafeteria plan. These changes are the newly introduced Simple Cafeteria Plans and the ineligibility of Over-the-counter drugs expenses. More information on each topic can be found below.
To implement a Simple Cafeteria Plan select the “Simple Cafeteria Plan” option under the “Employer Contributions” tab when you create your new Plan Design for the new year. The Plan Documents as well as the Explanation of Benefits have been updated for 2011. (Since the Congress has not decided on payroll taxes for 2011, the Explanation of benefits still refers to 2010 figures. They will be updated upon Congress and IRS approval.)
The update is available for immediate download.
AZ USA: Tuesday, December 14 - 2010
COBRA Subsidy Extended Through May 31, 2010
On April 15, 2010, the President signed H.R. 4851 which extends the subsidy eligibility date from the current March 31, 2010 (per the Temporary Extension Act of 2010) to May 31, 2010. Employees who are “involuntarily” terminated between September 1, 2008 and May 31, 2010 may be eligible for reduced rates (that are 65% subsidized by the Federal government).
Changes made by the H.R. 4851 are as follows:
- The Act changes the end date to whom should be offered COBRA premium subsides from 03/31/2010 to 05/31/2010.
- The Act extends notifying terminated employees who previously experience a Reduction in Hours Hours after September 1, 2008 and is then involuntarily terminated between March 2, 2010 and March 31, 2010 to May 31, 2010.
COBRA Solutions has made the necessary changes to the COBRA Administration Manager software and the new version is available for download by our current COBRA Solutions customers.
AZ USA: Monday, April 19 - 2010
Department of Defense Appropriations Act of 2010 Extends COBRA Subsidies
On December 19, 2009, the president signed another bill called the Fiscal Year 2010 Defense Appropriations Act (DOD) which included provisions to amend ARRA. The 2010 DOD Act extends the eligibility period for premium reductions for an additional two (2) months (through February 28, 2010) as well as extending the maximum period to receive government subsidies from 9 to 15 months.
Changes made by the 2010 DOD Act are as follows:
- The Act changes the end date to whom should be offered COBRA premium subsides from 12/31/2009 to 02/28/2009.
- The Act extends the maximum period to receive COBRA subsidies from 9 to 15 months.
- COBRA participants that may have reached the end of their reduced premiums and have terminated from COBRA will be permitted to re-enroll on the plan retroactively. The participant will have until 02/17/2009 or 30-days from the date of the letter (if the 30-day grace period extends past 02/17/2009) to make up premium payments.
- COBRA participants that have exhausted their subsidy time frame and who has made full premium payments will be notified of the subsidy extension and allowed to choose whether they want a refund of the overpaid premium or if they would like the overpayment credited to future months.
- Anyone who was an AEI on or after 10/31/2009 must receive a notice explaining the changes made by the 2010 DOD Act.
- COBRA Qualifiers who were terminated on or after 10/31/2009 must receive a notice explaining the changes made by the 2010 DOD Act.
- The act also clarifies that the date of the qualifying event should be used in determining an individual’s eligibility for premium assistance and not the date of the qualifier’s COBRA eligibility. Meaning, if an individual experiences a loss of coverage on 02/28/2010, that they may still be eligibility for premium assistance.
COBRA Solutions is currently in the process of updating the COBRA Administration Manager software and expects the new version to be released in the first week of January 2010. Current customers of COBRA Solutions should expect to receive instruction on updating their software and also detailed information on the software changes.
AZ USA: Wendsday, December 30 - 2009
New Legislation Proposes an Extension to COBRA Benefits
The American Recovery and Reinvestment Act of 2009 (ARRA) offered insurance relief to laid-off workers by subsidizing 65% of their COBRA premium. The act offered COBRA Participants up to nine months of subsidized rates. With the first eligible ARRA participants starting on March 1, 2009, their subsidized premiums are due to end on November 30, 2009.
Although the economy has been gradually getting better, unemployment is still moving higher. Companies are salvaging their bottom line but don’t seem to be in a rush to begin hiring. It is anticipated that the unemployment rate will hover around the 10% level through 2010. Because of this, Congressman Joe Sestak has introduced new legislation (H.R. 3930) to amend ARRA by extending the eligibility period and maximum assistance period for COBRA premium assistance.
If the new bill is passed as it was introduced, it would extend COBRA benefits in three ways. First, it would extend the total allowed amount of subsidized premiums from nine (9) months to fifteen (15) months. Second, it would temporarily extend the total amount of allowed COBRA coverage for individuals who experience a qualifying event due to “Termination of Employment” or “Reduction of Work Hours” from eighteen (18) months to twenty-four (24) months. Third, it would extend the qualifying eligibility period that is due to expire on December 31, 2009 for six (6) additional months to June, 30, 2010.
Please remember that this is newly introduced legislation and at this time has not been enacted by the Senate and House of Representatives. Therefore, COBRA Solutions will continue to monitor the new bill and will keep all of our clients up-to-date as changes become clearer. Please rest assured, if the bill is passed, we will update the COBRA Administration Manager software to meet the new law requirements and make the updates available for download as soon as possible.
AZ USA: Thursday, October 29 - 2009
COBRA Administration Manager will be updated March 1, 2009
COBRA Solutions will release a new version of COBRA Administration Manager on March 1, 2009. The new release will include necessary changes to administer the American Recovery and Reinvestment Act of 2009. Some of the expected software changes are;
- Qualifying event letter will be updated to include information on government provided subsidy.
- Qualifying event letter will also be updated to include the optional 90-day open enrollment period (if elected by the employer).
- A new notice to inform eligible qualifiers of their new 60-day election period.
- A new notice for existing COBRA participants who are eligible for the subsidy.
- Billing procedures will be updated to reflect new COBRA rates for subsidized participants.
- Reports will be updated.
Issues that you will want to think about prior to the release;
- Determine which participants and qualifiers were involuntarily terminated since September 1, 2008 (Use new report found in version 11.3.3).
- Determine whether you wish to allow government assisted participants to switch to alternative health coverage (Optional).
- Coordinate with payroll to revise systems and other procedures for paying the government’s 65% share of the COBRA premium.
- Coordinate with payroll to revise systems and other procedures for obtaining reimbursement of these amounts from the federal government.
Users currently enrolled on our Annual Maintenance Agreement will receive complementary upgrades through the software’s interface. If you are not currently enrolled on or Annual Maintenance Agreement or would like more information about purchasing our software, please call us toll-free at 800-325-1957.
AZ USA: Thursday, February 19 - 2009
Economic Stimulus bill will change the way you administer COBRA
A Brief Over-View:
The Economic Stimulus bill that President Obama is expected to sign today in Denver Colorado includes major changes to how you will administer COBRA. The bill will allow anyone who experiences an involuntary loss of coverage between September 1, 2008 and December 31, 2009 to pay 35% of their COBRA premium for up to 9 months.
Previously terminated employees who experienced an involuntary loss of coverage and did not elect (possibly those who elected and already dropped-coverage as well) to continue coverage under COBRA will be allowed a new 60-day election period with a COBRA start date of 3/1/2009. In the event that this causes laps in coverage greater than 63-days, penalties for lack of continuation of coverage will be waived and no preexisting condition limitation will be imposed.
AZ USA: Tuesday, February 17 - 2009
Cafeteria Plan Manager 2008 Release Information
2008 Tax Figures have been released – This year, it took until January 18th for Congress to pass the 2008 payroll tax code and have the IRS print it in Publication 15. The new figures and calculations have been placed in the software as well as updating the Explanation of Benefits document. It is recommended you update your system to utilize these modified documents.
To update your system, select the “Update Software Via Internet” option found under the File Menu. The system is going to want to update the Plan documents as well as the Explanation of Benefits. If you have modified/edited these documents and do not want the system to copy over them, do not update them.
2008 Cafeteria Plan Manager Changes – In 2008, the Cafeteria Plan Manager has been upgraded in numerous ways. First (and most noticeably), the Things-to-do list is now part of the Navigator and has been redesigned for speed. Second, we have implemented the ability to enter Third Party Administrator (TPA) information and two methods for collecting TPA fees. Third, for employer groups in Massachusetts, you will now have the ability to use the state-created documents for the Massachusetts Health Care Reform Law. Forth, we have replaced the notes section of member and company forms so the user may enter as many notes as they like and even categorize them. Lastly, we took recommendations from our users and incorporated them into this new edition.
AZ USA: Thursday, January 31 - 2008
COBRA Solutions announce the release of COBRA Administration Manager version 11
COBRA Solutions, Inc. is very excited to announce the release of our new Version 11 COBRA Administration Manager (CAM) on November 1, 2007. We continue to re-invest in our software to provide our customers with leading edge technology that has made CAM the industries number one-selling COBRA Administration software. The program has been updated with over 50 new changes and overhauled with enhanced capabilities designed to simplify the administration process. This month’s COBRAinReview will explain some of the changes made so you can take advantage of the software’s new capabilities and features.
AZ USA: Wednesday, November 01 - 2007
If you are not using a Cafeteria Plan...You are are losing Money!
Employer saves a minimum of
$.0765 per dollar that employee puts into plan.
Employee uses pre-tax dollars to pay for Medical Expenses
and Dependent Care.
Most employers have been receiving large rate increases from their insurance providers because medical trend is over 10%. In many cases, the employer is forced to pass on the increase to employees. One good way to minimize rate increases is to start a Cafeteria Plan. A Cafeteria Plan allows employees to pay for their portion of premiums on a pre-tax basis. This lowers their taxable base, therefore decreasing federal, FICA and most state's taxes. Most employees (depending on their tax bracket) will see that a Cafeteria Plan saves them 15% to 39% of their cost of premiums. Not only does the employee save money but the employer sees an approximate 7.65% reduction in their FICA and other payroll taxes.
AZ USA: Wednesday, November 03 - 2007
Do you need help keeping track of Your Employee Information
Let COBRA Solutions
offer you a management solution with the Employee Database Manager software.
Employers are required to maintain data on employees for numerous reasons.
Maintaining a file cabinet has become a daunting task, requiring more filing
cabinet space as the years go by. The Employee Database Manager will store your
information digitally so you may retrieve employee information and
communications in seconds. Below is just a few of the segments whereby the
software will retain information and increase your productivity:
AZ USA: Wednesday, July 31 - 2007
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