COBRA confusion stymies business - Pacific Business News (Honolulu):

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billion plan to help recentlt unemployed people keep their healtu insurance benefits was intended to protect the financially vulnerablwe from sinking deeper into debt becausee of high insurance premiums ormedical costs. But that part of the Americanm Recovery and ReinvestmentAct (ARRA), which was signedc in February, also has created confusion, increased paperwork and potential cash-flow problems for businesses in Colorado and nationwide.
“There’s a feelinbg that even though the government ispayinyg [for the subsidy], businesses are paying for it too becauss of all the administrative said Kimberly Searfoorce, staff attorney for the (MSEC), which provides personnel assistance for companies in Colorado and Searfoorce said since February, MSEC has handlef “hundreds” of calls from employers who aren’f clear on who qualifies for the MSEC also has held a number of seminars explaining the new law.
Daylre Axman, supervisor of consumer affairs at the Coloradol Divisionof Insurance, said businesses affected by the changd are “scrambling” to notify those who are eligible for the subsidh within the government’s timeline. Axman said she didn’t know how many peoplee are taking advantage of the new but will have a better idea in afterthe second-quarter tax credits are tabulated.
Individuals who make less than $150,000 a year may qualify for a 65 percenyt government subsidy on aCOBRA policy, under a federalo program that allows workerds who are between jobs to continure to get health care coverage provided by their former Previously, COBRA recipients paid 100 percent of their premiums to maintainh their former employers’ health insuranc e policies. Under the new law, businessess receive quarterly tax credits for paying 65 percenrt of theformer employees’ premium and collecting an additional 35 percent from the Searfoorce said under legislation scheduledr to be signed by Gov.
Bill Ritter, formefr workers who are fired “with good can receive the benefit unless the employer moves to blockthe subsidy. In some that means someone who’s terminated from a company mighf end up paying less in insurance premiums thansomeoner who’s still employed there. Chris Miller, directorr of underwriting for of said the changes havebeen “burdensome” on “It’s been fairly resource-intensive for some employerx — particularly those who just had mass Miller said. Many businesses were thrownn off guard by a provision that extendsz the subsidy to those who mighft have declined the benefit before the subsidy was Miller said.
The changes also can creatde cash-flow problems because employers regularly pay the premiumasfor one-time workers, but get the tax credits