Featured COBRA FAQs

If an employee resigns are they eligible for the subsidy? No. Only employees who are involuntarily terminated are eligible for the subsidy.  If an employee resigns they are not eligible, unless the resignation was at the employer’s direction. For example, an incentive to resign with knowledge of an imminent layoff could be considered an involuntary termination. If an employee’s position is eliminated but they are offered an alternative position at a 50% reduction in salary and they do not accept it, is that an involuntary termination or not? In this scenario, the termination is at the direction of the employer since the position is being eliminated. Therefore, this employee would be eligible for the COBRA subsidy. If an employee was involuntarily terminated on August 2, 2008 but did not lose coverage until the August 31, 2008, is this employee eligible for the COBRA subsidy?  No, the employee is not eligible for the COBRA subsidy. The DOL has indicated that both the qualifying event date and the benefit termination date must be within the defined dates in the law to be eligible for the COBRA subsidy. In other words, all the key dates must occur on or after September 1, 2008, and on or before December 31, 2009. Are dependents eligible for the COBRA subsidy if their qualifying event is due to the fact that they turn 20 years of age and are not attending college? The dependent is eligible for 36 months of COBRA but is not eligible for the COBRA subsidy since the qualifying event is not an involuntary termination of employment. However, if the dependent’s qualifying event follows an involuntary termination of employment that occurs on or after September 1, 2008 and both events occur on or before December 31, 2009 then the dependent is eligible for the COBRA subsidy. How does an Assistance Eligible Individual make a permanent election to waive the right to the premium reduction? An assistance eligible individual who wants to make a permanent election to waive the right to the premium reduction makes the election by providing a signed and dated notification (including a reference to “permanent waiver”) to Ceridian at the address provided in this notification. There is no separate additional notification to any government agency. If an assistance eligible individual makes the permanent election to waive the right to the premium reduction, the individual may not later reverse the election and may not receive the premium reduction for any future period of COBRA continuation coverage in 2009 or 2010, regardless of modified adjusted gross income in those years. Link to DOL ARRA poster

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Several clients have recently asked about a new poster created by the DOL about COBRA coverage. Please click here to access the poster if you want to print and display it in your workplace.