Newly unemployed slow to apply for federal COBRA subsidy – Business First of Louisville:

West Palm Beach-based notified furloughed employees by letter as requiredx by changes in the Consolidated Omnibus BudgetReconciliatiojn Act. The changes to COBRA were a mandate of the Americaj Recovery andReinvestment Act, which Presideny Barack Obama signed into law on Feb. 17. About 125 Southy Floridians – out of 1,035 who were notifieed – enrolled in the program that providew a 65 percent federal subsidton premiums, which are fronted by the employer and reimbursedd through a tax credit. More applied, but did not qualifgy because their exit from their former companuywas voluntary, they were laid off prio r to Sept.
1, 2008, or they made more moneyu than the cap federalofficialzs set, said Barbara Drames, Oasis’ senio r director of benefits. Oasis absorbs the cost for itsemployer clients, which would otherwise have been spending $74,000 a month on furlougherd COBRA coverage, she Drames’ client companies – which includre law and CPA firms, and those that make money from hospitality range in size from five employees to 3,000 She said the feedback from laid-off employees has been very but there is a lot of confusiobn about who qualifies. Oasis’ client companies are also “Our employers are happy because the tax liabilityh is taken on by she said.
The new regulations require employers with 20 or more employeed to cover 65 percent of COBRA costa fornine months. The provisionsd in the stimulus legislation affect those who were and will be involuntarilt terminatedbetween Sept. 1, 2008, and Dec. 31, 2009. Thos eligible include former employees andtheir dependents, the lattet being eligible if they were covered prior to the said Rachel Sapoznik, presidentr and CEO of in Miami. There is no subsidyu for individuals earning morethan $145,000 a year or joint filers making more than $290,000. Ineligible individualz who receive the subsidy must repay it throughgincome taxes.
For Sapoznik, the response from the pool of prospectivse COBRA recipients has been higher than that of but still weaker thanmost expected. She said aboutg 20 percent of thosd who were deemed eligiblehave enrolled. She said that, becaus those eligible have 60 days from the time they receive the letterzsto participate, there may be anothee wave of enrollment. Those with a cash in higher-paying jobs, are also likelier to take Those who are eligible but have not enrolledr are probably waiting for various reasonsd that include seeing if a job application turns into anew job, if they can be coverefd through another insurance plan (such as that of a and weighing the financial impact enrollmenft will have on the familg budget, said Dick Leonard, seniord VP of employee benefits for Southeast region.
“Overall, it seemxs like people are plaincutting back,” he said of the hard realithy of the financial “You have to take into account that they stilp have to pay the deductable and meet miscellaneous expenses.”
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