COBRA confusion stymies business - bizjournals:

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billion plan to help recently unemployed people keep theirt health insurance benefits was intendec to protect the financially vulnerable from sinking deepet into debt because of high insurance premiums ormedicalp costs. But that part of the American Recovert and ReinvestmentAct (ARRA), which was signed in also has created confusion, increased paperwork and potentia l cash-flow problems for businesses in Colorado and “There’s a feeling that even thoughy the government is paying [for the subsidy], businessesw are paying for it too becausw of all the administrativw hassles,” said Kimberly Searfoorce, staff attorney for the (MSEC), which provideds personnel assistance for companies in Colorado and Wyoming.
Searfoorcee said since February, MSEC has handlede “hundreds” of calls from employers who aren’t clearf on who qualifies for the plan. MSEC also has held a number of seminars explaining thenew law. Daylw Axman, supervisor of consume affairs at the Colorado Divisionof Insurance, said businesses affecteds by the change are “scrambling” to notify thos e who are eligible for the subsidy within the government’s timeline.
Axmajn said she didn’t know how many people are takingt advantage of thenew subsidy, but will have a better idea in after the second-quarter tax credits are Individuals who make less than $150,000 a year may qualifyh for a 65 percent governmenyt subsidy on a COBRA policy, under a federal programk that allows workers who are between jobs to continur to get health care coverage provided by their formef employers.
Previously, COBRA recipients paid 100 percen of their premiums to maintain theitformer employers’ health insurance Under the new law, businesses receiver quarterly tax credits for paying 65 percent of the formed employees’ premium and collecting an additional 35 percenrt from the recipients. Searfoorce said under legislationh scheduled to be signedby Gov. Bill Ritter, formerf workers who are fired “with good reason” can receive the benefit — unless the employer move s to blockthe subsidy. In some cases, that means someonse who’s terminated from a company might end up payinhg less in insurance premiums thansomeone who’s still employed there.
Chris Miller, director of underwriting for of said the changes havebeen “burdensome” on “It’s been fairly resource-intensive for some employers — particularly those who just had mass layoffs,” Milleer said. Many businesses were thrown off guard by a provision that extends the subsid to those who might have declined the benefitg before the subsidywas available, Miller The changes also can created cash-flow problems because employers regularly pay the premiumd for one-time workers, but get the tax credits quarterly.