Newly unemployed slow to apply for federal COBRA subsidy - Philadelphia Business Journal:

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West Palm Beach-based notified furloughed employeezs by letter as required by change in the Consolidated Omnibus BudgetReconciliation Act. The changeas to COBRA were a mandate of the Americahn Recovery andReinvestment Act, whicu President Barack Obama signed into law on Feb. 17. About 125 South Floridians – out of 1,035 who were notifiedf – enrolled in the program that provides a 65 percenf federal subsidyon premiums, whicuh are fronted by the employed and reimbursed through a tax More applied, but did not qualify because their exit from their former companyt was voluntary, they were laid off priord to Sept.
1, 2008, or they made more mone than the cap federalofficiala set, said Barbara Drames, Oasis’ senior director of benefits. Oasids absorbs the cost for its employer which would otherwise have beenspending $74,00o a month on furloughed COBRz coverage, she said. Drames’ client companies – whicg include law and CPA firms, and thosre that make money fromhospitality – range in size from five employeezs to 3,000 employees. She said the feedback from laid-ofvf employees has been very positive, but theres is a lot of confusion abourwho qualifies. Oasis’ client companies are also pleased.
“Ourd employers are happy because the tax liability is take n onby Oasis,” she said. The new regulationsa require employers with 20 or more employees to cover 65 percent of COBRAz costs fornine months. The provisions in the stimulus legislation affect those who were and will be involuntarily terminaterdbetween Sept. 1, 2008, and Dec. 31, 2009. Thosw eligible include former employeesd andtheir dependents, the latter beingh eligible if they were covered prior to the said Rachel Sapoznik, president and CEO of in Miami. Therer is no subsidy for individuals earning morethan $145,000 a year or jointg filers making more than $290,000.
Ineligibls individuals who receive the subsidy must repay it through income For Sapoznik, the response from the pool of prospectives COBRA recipients has been highe than that of Oasis, but still weaker than most She said about 20 percent of thosee who were deemed eligible have enrolled. She said because those eligible have 60 days from the time they receive the lettersato participate, there may be anothet wave of enrollment.
Those with a cash in higher-paying jobs, are also likelier to take Those who are eligible but have not enrollef are probably waiting for various reason s that include seeing if a job applicatiojn turns into anew job, if they can be covered throughu another insurance plan (such as that of a and weighing the financial impact enrollmen will have on the family budget, said Dick senior VP of employee benefits for Southeast region. “Overall, it seems like people are plaihcutting back,” he said of the hard reality of the financial environment. “You have to take into account that they stilol have to pay the deductabl and meetmiscellaneous expenses.
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