Monday, January 19, 2009

Is Your Business Ready for the COBRA Premium Subsidy?

/PRNewswire/ -- As the unemployment rate grows, so do the numbers of unemployed workers and their families who are coping with the loss of health insurance. COBRA continuation coverage can offer critical (albeit small) peace of mind, but while many workers have the right to purchase such coverage, only about 20% actually opt in because the cost is often prohibitively high. A November 2008 study by non-profit advocacy group Families USA reports that COBRA premiums average $388 per month for individuals, and $1,069 for family coverage (view the whole report at http://www.familiesusa.org/assets/pdfs/cobra-2009.pdf ).

As if there weren't enough administrative duties associated with COBRA administration, hold on to your business hats: As part of the $825 billion economic recovery bill unveiled last week by House Democrats, people who lost their jobs after September 1, 2008 could have the government pay almost two- thirds of their health insurance premiums. The length of the subsidy would be 18 months, equal to the maximum amount of time employees can carry COBRA from their former employers. With events such as divorce, separation, or death, the time period is extended to 36 months. In effect, this offers a second chance to people who may have passed on the offer the first time. It appears that President-Elect Obama backs the idea, so it looks like the bill will pass.

Except for federal and certain religious organizations, all employers with 20 or more employees are required by law to offer COBRA. Not only must they must send notices within 90 days to any employee beginning coverage or within 44 days within ending health benefits, you must be able to prove it. There are stiff penalties for failing to comply, and the DOL makes changes regularly. An estimated 80% of companies are already not in compliance with Federal COBRA regulations. Are you?

Mangrove's full-service benefits administration is streamlining HR departments across the country. Organization of all sizes are taking advantage of our flexible, personalized affordable offerings for COBRA, keeping them compliant and aware of the various ever-changing regulations. In light of this new subsidy, more companies than ever will be looking to outsource their COBRA administration to be compliant. Aside from a low price, the peace of mind is priceless. Avoid the rush; talk to a Benefits Specialist at Mangrove today to see how we can help you, or visit us at http://www.emangrove.com/cobraadmin.aspx to check out our full service offering.

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