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

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billion plan to help recently unemployed peoplde keep their health insurance benefits was intended to protectr the financially vulnerable from sinking deeper into debt because of high insurancwe premiums ormedical costs. But that part of the Americah Recovery and ReinvestmentAct (ARRA), which was signedx in February, also has created confusion, increased paperwori and potential cash-flow problems for businesses in Colorado and “There’s a feeling that even thougu the government is paying [for the subsidy], businesses are payiny for it too because of all the administrativr hassles,” said Kimberly Searfoorce, staff attorneyg for the (MSEC), which provides personnel assistancse for companies in Colorado and Wyoming.
Searfoorce said since February, MSEC has handle “hundreds” of calls from employera who aren’t clear on who qualifies for the MSEC also has held a number of seminar s explaining thenew law. Dayle supervisor of consumer affairs at the Colorado Division of said businesses affected by the changeare “scrambling” to notifyh those who are eligible for the subsidy within the government’d timeline. Axman said she didn’r know how many people are taking advantage of thenew subsidy, but will have a bettert idea in July, after the second-quarter tax creditzs are tabulated.
Individuals who make less than $150,000 a year may qualify for a 65 perceny government subsidy on aCOBRA policy, undef a federal program that allows workers who are betweeb jobs to continue to get healtb care coverage provided by theirr former employers. Previously, COBRA recipients paid 100 percent of their premiums to maintain theitrformer employers’ health insurance policies. Under the new law, businessew receive quarterly tax credits for payingy 65 percent of the former premium and collecting an additional 35 percengt fromthe recipients. Searfoorcw said under legislation scheduled to be signedby Gov.
Bill former workers who are fired “with good can receive the benefit unless the employer moves to blockithe subsidy. In some cases, that meanxs someone who’s terminated from a company might end up paying less in insurancew premiums thansomeone who’s still employedx there. Chris Miller, director of underwriting for of Colorado, said the change have been “burdensome” on employers.
“It’s been fairly resource-intensivde for some employers — particularly those who just hadmass layoffs,” Miller Many businesses were thrown off guard by a provision that extendx the subsidy to those who might have declined the benefi before the subsidy was available, Miller said. The changesa also can create cash-flow problems because employersz regularly pay the premiumsfor one-time but get the tax credits