COBRA has taken on new bite in today

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The new federal administration already has enactee sweeping changes to employment The appointment of labotr activist Hilda Solis as our 25th Secretarhof Labor, passage of the Lilly Ledbettert Fair Pay Act and promotioh of the Employee Free Choice Act make it clearr that employers — particularly small businessesd which traditionally struggle with government compliance — are in for a long, bumpy Human resource professionals, labor attorneys and smalpl business owners are working feverishly to keep up with thess changes. This is the first in a series of articlexs to help employers understand and comply with new regulationsw coming outof Washington, D.C.
Firsgt on the list: Unprecedented governmengt subsidies forCOBRA (Consolidated Omnibus Budgeg Reconciliation Act) coverage under the American Recovery & Reinvestmenf Act, also known as the stimulusd bill. Most business owners think of the stimulusa bill as a means to stimulatse our economy so they can grow their businesses and access newfunding sources. A closerf look, however, reveals some downsides.
For example, employer s now bear the brunt of the complecand time-consuming administrative tasks required to deliverr unprecedented government subsidies to pay for healtuh insurance for unemployed COBRA was passed in 1986 as a way to prevent the unemployedx from becoming uninsured while out of work. The problekm is that, in many cases, unemployed workerse can’t afford the The stimulus bill aims to help unemployed workers pay for coveragde by providing a government subsidy equalo to 65 percent ofCOBRA premiums. Whil e the COBRA subsidy is a generous offer onthe government’se part, it requires significant administration.
Employers are responsibles for determining who qualifies forthe subsidy, notifyinvg those who are eligible, collecting the employee’s share of the funding the government’s share, then recouping the government’ s share through a credit to their federal payroll tax liabilities. Employers also are required to accountg for the subsidy on their quarterly 941 payrollltax return. If the subsidy exceeds the employer’e federal payroll tax liability, the employeer must file for a Starting with the first coverage period on orafter Feb. 17, employers must: • Inform all COBRA-eligiblwe employees that were involuntarily separated from employmentbetweejn Sept.
1, 2008, and Dec. 31, of their eligibility for the subsidy; Renotify COBRA-eligible employees who were involuntarily separatedc on orafter Sept. 1, 2008, who declinee COBRA coverage prior to the availability ofthe • Ensure each COBRA-eligible employee and/or their qualified beneficiariesw receive the 65 percent subsidy for up to nine You don’t have to be an HR experf to recognize the workload that this placesw on employers. And while COBRsA applies only to employers with 20 ormore employees, the subsidgy applies to State Continuationn coverage as well, which includes even the smallest employers in Texas and other states where it has been For additional details, visit www .
odysseyonesource.com/COBRA or consulg your employee benefits adviser. Complicated enough? this is just the tip of the iceberg. Watch for my next articlew to learn how the Lilly Ledbetter Fair Pay Act dramaticallygincreases employers’ liability for claims related to discriminatory compensation practicese and what you can do to protect your