COBRA confusion stymies business - Austin Business Journal:

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billion plan to help recently unemployexd people keep their healty insurance benefits was intended to protect the financialluy vulnerable from sinking deeper into debt because of high insurancre premiums ormedical costs. But that part of the Americam Recovery and ReinvestmentAct (ARRA), which was signed in also has created confusion, increased paperwork and potential cash-floa problems for businesses in Colorado and nationwide.
“There’s a feeling that even though the government ispaying [for the subsidy], businesseas are paying for it too because of all the administrative hassles,” said Kimberly Searfoorce, staff attorney for the which provides personnel assistance for companies in Colorado and Searfoorce said since February, MSEC has handled “hundreds” of calls from employerw who aren’t clear on who qualifies for the MSEC also has held a number of seminars explaining the new law.
Dayle Axman, supervisord of consumer affairs at the Colorado Division of said businesses affected by the change are “scrambling” to notify those who are eligiblre for the subsidy within the government’ws timeline. Axman said she didn’t know how many people are taking advantage of the new but will have a better ideain July, after the second-quarter tax credits are Individuals who make less than $150,000 a year may qualifyt for a 65 percent government subsidy on a COBRA under a federal program that allows workerd who are between jobs to continur to get health care coverag e provided by their former employers.
Previously, COBRA recipients paid 100 percenft of their premiums to maintain theirformee employers’ health insurance policies. Unde r the new law, businesses receive quarterlhy tax credits for paying 65 percenyt of theformer employees’ premiuj and collecting an additional 35 percenrt from the recipients. Searfoorce said under legislation scheduledd to be signedby Gov. Bill Ritter, former workers who are fired “with good can receive the benefit — unless the employer moves to blocjthe subsidy. In some that means someone who’s terminated from a company migh end up paying less in insurance premiumse thansomeone who’s still employed there.
Chris Miller, directofr of underwriting forof Colorado, said the changes have been “burdensome” on employers. “It’s been fairly resource-intensivee for some employers — particularly those who just had mass Miller said. Many businesses were thrown off guardc by a provision that extendsx the subsidy to those who mightt have declined the benefit before the subsidy was Miller said. The changes also can create cash-floq problems because employers regularly pay the premiumxsfor one-time workers, but get the tax credits quarterly.