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

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West Palm Beach-based notified furloughed employees by letter as required by changes in the Consolidated Omnibus BudgetReconciliation Act. The changeds to COBRA were a mandate of the American Recovergy andReinvestment Act, which President Baraco Obama signed into law on Feb. 17. Aboug 125 South Floridians outof 1,035 who were notified enrolled in the program that provides a 65 percenty federal subsidy on premiums, which are frontedd by the employer and reimbursec through a tax credit.
More but did not qualif y because their exit from their former companytwas voluntary, they were laid off prior to 1, 2008, or they made more mone than the cap federal officials set, said Barbara Oasis’ senior director of benefits. Oasis absorbsd the cost for its employer which would otherwise have beenspendinyg $74,000 a month on furloughed COBRA she said. Drames’ client companies – which include law and CPA and those that make money from hospitality range in size from five employeeszto 3,000 employees. She said the feedbac from laid-off employees has been very positive, but therr is a lot of confusion aboufwho qualifies.
Oasis’ client companies are also pleased. “Our employers are happy because the tax liability is take n onby Oasis,” she said. The new regulations require employers with 20 or more employees to cover 65 percentr of COBRA costs for nine The provisions in the stimulus legislatiomn affect those who were and will be involuntarilu terminatedbetween Sept. 1, 2008, and Dec. 31, 2009. Thosde eligible include former employees andtheie dependents, the latter being eligible if they were coverecd prior to the termination, said Rachel Sapoznik, presidengt and CEO of in Miami. There is no subsidy for individualsz earning morethan $145,000 a year or joint filere making more than $290,000.
Ineligible individuals who receivs the subsidy must repay it throughincome taxes. For Sapoznik, the responser from the pool of prospective COBRA recipients has been higherd than thatof Oasis, but still weaker than most She said about 20 percent of those who were deemed eligible have enrolled. She said because those eligible have 60 days from the time they receivd the lettersto participate, there may be anothert wave of enrollment. Those with a cash cushion, in higher-payingh jobs, are also likeliet to take COBRA.
Those who are eligibl e but have not enrolled are probablh waiting for various reasons that include seeinv if a job application turns into anew job, if they can be covereds through another insurance plan (such as that of a and weighing the financial impact enrollment will have on the familyh budget, said Dick Leonard, senior VP of employe benefits for ’ Southeast region. it seems like people are plaincuttinfg back,” he said of the hard realituy of the financial environment. “You have to take into accountf that they still have to pay the deductabls and meetmiscellaneous expenses.
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