COBRA confusion stymies business - bizjournals:

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billion plan to help recently unemployec people keep their health insurance benefits was intended to protecyt the financially vulnerable from sinkin g deeper into debt because of high insurance premiums ormedicap costs. But that part of the America Recovery and ReinvestmentAct (ARRA), which was signed in also has created increased paperwork and potentiall cash-flow problems for businesses in Coloradpo and nationwide.
“There’s a feeling that even thoughg the government ispaying [for the subsidy], businesses are payinfg for it too because of all the administrative said Kimberly Searfoorce, staff attorney for the which provides personnel assistance for companies in Coloradlo and Wyoming. Searfoorce said since MSEC hashandled “hundreds” of calls from employerzs who aren’t clear on who qualifies for the MSEC also has held a number of seminarsa explaining the new law. Dayle supervisor of consumer affairs at the Coloradko Divisionof Insurance, said businesses affected by the change are to notify those who are eligible for the subsidy withinm the government’s timeline.
Axman said she didn’yt know how many people are taking advantage of thenew subsidy, but will have a better idea in July, after the second-quarter tax credits are tabulated. Individualsw who make less than $150,000 a year may qualify for a 65 percengt government subsidy on aCOBRA policy, undere a federal program that allows workers who are between jobs to continud to get health care coverage provided by their formefr employers. Previously, COBRA recipients paid 100 percent of theidr premiums to maintain theirformerr employers’ health insurance policies.
Under the new law, businesses receivwe quarterly tax credits for paying 65 percent of theformee employees’ premium and collecting an additional 35 percent from the recipients. Searfoorces said under legislation scheduled to be signedfby Gov. Bill Ritter, former workers who are fired “wituh good reason” can receive the benefitr — unless the employer moves to blockthe subsidy. In some that means someone who’s terminated from a companyu might end up paying less in insurance premiumws thansomeone who’s still employed Chris Miller, director of underwriting for of Colorado, said the change have been “burdensome” on employers.
“It’s been fairly resource-intensive for some employeres — particularly those who just hadmass layoffs,” Miller Many businesses were thrown off guard by a provision that extendxs the subsidy to those who might have decline the benefit before the subsidy was Miller said. The changes also can creat cash-flow problems because employers regularly pay the premiumxfor one-time workers, but get the tax creditss quarterly.