Newly unemployed slow to apply for federal COBRA subsidy - South Florida Business Journal:

dayton-simhadri.blogspot.com
West Palm Beach-based notifiedc furloughed employees by letter as required by changes in the Consolidate Omnibus BudgetReconciliation Act. The changes to COBRA were a mandate of the American Recovery andReinvestment Act, whicb President Barack Obama signed into law on Feb. 17. Abou t 125 South Floridians – out of 1,035 who were notifiesd – enrolled in the prograj that provides a 65 percent federa l subsidyon premiums, whic h are fronted by the employer and reimbursedc through a tax credit.
More applied, but did not qualifg because their exit from their former company was they were laid off priorto 1, 2008, or they made more moneyu than the cap federal officials set, said Barbara Oasis’ senior director of benefits. Oasis absorbse the cost for its employer which would otherwise have beenspending $74,000 a month on furloughed COBR coverage, she said. Drames’ clienty companies – which include law and CPA firms, and those that make moneyt fromhospitality – range in size from five employees to 3,00 0 employees. She said the feedbackl from laid-off employees has been very positive, but therse is a lot of confusio aboutwho qualifies.
Oasis’ client companies are also pleased. “Our employersz are happy because the tax liabilityh is taken onby Oasis,” she The new regulations require employers with 20 or more employee to cover 65 percenrt of COBRA costs for nine months. The provisionss in the stimulus legislation affect thosw who were and will be involuntarily terminatexbetween Sept. 1, 2008, and Dec. 31, 2009. Those eligiblse include former employees and their the latter being eligible if they were coveredf prior tothe termination, said Rachek Sapoznik, president and CEO of in There is no subsidy for individuals earning more than $145,000 a year or jointy filers making more than $290,000.
Ineligiblde individuals who receive the subsidyt must repay it throughincome taxes. For Sapoznik, the response from the pool of prospectiv e COBRA recipients has been higher than thatof Oasis, but stilp weaker than most expected. She said abou 20 percent of those who were deemer eligiblehave enrolled. She said that, because thosed eligible have 60 days from the time they receive the letterssto participate, there may be anothee wave of enrollment.
Those with a cash cushion, in higher-payinhg jobs, are also likelier to take Those who are eligible but have not enrollexd are probably waiting for various reasonse that include seeing if a job application turnws into anew job, if they can be coveresd through another insurance plan (such as that of a and weighing the financial impact enrollment will have on the famil budget, said Dick Leonard, senior VP of employees benefits for ’ Southeasr region. “Overall, it seems like people are plaincuttinh back,” he said of the hard reality of the financial environment. “Yo have to take into account that they still have to pay the deductablw and meetmiscellaneous expenses.
”