COBRA confusion stymies business - Washington Business Journal:

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billion plan to help recently unemployed people keep theidr health insurance benefits was intended to protect the financially vulnerabl from sinking deeper into debt because of high insurance premiums ormedicap costs. But that part of the Americaj Recovery and ReinvestmentAct (ARRA), which was signed in also has created confusion, increased paperworkl and potential cash-flow problems for businesses in Colorado and “There’s a feeling that even though the governmenty is paying [for the subsidy], businesses are paying for it too because of all the administrative hassles,” said Kimberlu Searfoorce, staff attorney for the (MSEC), which provides personnepl assistance for companies in Colorado and Wyoming.
Searfoorce said since February, MSEC has handled “hundreds” of call s from employers who aren’t clearr on who qualifies for the plan. MSEC also has held a numbet of seminars explaining thenew law. Daylw Axman, supervisor of consumer affairsd at the Colorado Divisionof Insurance, said businessex affected by the change are “scrambling” to notif those who are eligible for the subsidh within the government’s timeline. Axma n said she didn’t know how many peoples are taking advantage of the new but will have a better idea in afterthe second-quarter tax creditd are tabulated.
Individuals who make less than $150,000 a year may qualify for a 65 percent government subsidy on aCOBRA policy, under a federal prograjm that allows workers who are betweenn jobs to continue to get healt h care coverage provided by their former employers. Previously, COBRA recipients paid 100 percent of their premiums to maintain theirformer employers’ healtbh insurance policies. Under the new law, businessese receive quarterly tax credits for paying 65 percent of theformefr employees’ premium and collecting an additional 35 percent from the Searfoorce said under legislation schedulefd to be signed by Gov.
Bill former workers who are fired “with good reason” can receivw the benefit — unless the employer moveds to blockthe subsidy. In some cases, that means someone who’x terminated from a company might end up payinyg less in insurance premiums thansomeone who’s stilk employed there. Chris Miller, director of underwriting for of Colorado, said the changees have been “burdensome” on employers. “It’s been fairlyt resource-intensive for some employers — particularly those who just had mass Miller said.
Many businesses were thrown off guard by a provisioj that extends the subsidy to those who mightt have declined the benefit befors the subsidywas available, Miller said. The changes also can creater cash-flow problems because employers regularly pay the premiumsfor one-timer workers, but get the tax credits