COBRA is Changing

For all you denizens of the dark arts of family law, the rules on COBRA are changing come this Sunday (March 1st)

The American Recovery and Reinvestment Act of 2009 (ARRA) is changing COBRA so that the employee only has to pay 35% of the premium cost to the employer instead of the current up to 102%. Even if the employee opted out of their COBRA coverage, they will be able to get COBRA coverage under the new terms unless they were a voluntary quit or were fired for gross misconduct. The increased employer share of the cost will be paid for by government subsidy (basically). The coverage will only last for 9 months (instead of the 18 months under regular COBRA).

If the employee gets a new job and "forgets" to tell the old employer about it, they have to pay back 110% of the employer's share. There are some rules on that too.

If the employee makes over $125,000 per year, there will be a phase-out up to $145,000 a year. Over $145,000 a year, there is no change. It may or may not benefit a given employee in the phase out range.

Employers to whom this change applies must send out notices to the affected employees by April 18th.

Catherine Earnshaw-Hobbs
1328 NE Windsor Dr
Lee's Summit, MO 64086
Tele: 816-246-4429
Fax: 816-246-9049

Disclaimer: Employee benefits questions are complex and this general information should not be relied upon to make a decision. Rather, it is posted here to bring attention to the issues relating to COBRA.

The Carson Law Firm: Family Law Attorneys -- Serving St. Louis Families for Over a Decade

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