Important:

Our office is currently closed, but we continue to provide legal services by working remotely.

In light of Governor Wolf’s emergency declaration and current recommendations our office is currently closed.  Our attorneys and staff continue to work remotely, however, and we can assure you they are set up to respond to your calls, emails and all communications.  For more details on AMM operations during this time, read our full update.  

Thank you for your understanding, and please take care.

Client Alert- New COBRA Coverage Rules

NEW COBRA COVERAGE RULES IMPOSE ADDITIONAL FINANCIAL AND ADMINISTRATIVE  BURDENS ON EMPLOYERS

 The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) requires employers who employ twenty or more employees to allow terminated employees to elect continuation coverage.  The coverage will continue for eighteen months after termination, but the terminated employee can continue the coverage under certain circumstances.  COBRA requires employers to provide notice to employees that the coverage exists, and notice upon termination of the availability of the coverage.  Previously, employers could charge the terminated employee 102% of the premium for COBRA coverage. As a result of the American Recovery and Reinvestment Act (the “Act”), employers may now be required to help terminated employees defray the cost of healthcare. 

 

For employers, the Act imposes new Notice and premium subsidy requirements.  Beginning March 1, 2009, if an employee loses coverage under a health plan between September 1, 2008 and December 31, 2009 as a result of the employee’s involuntary termination of employment, and elects COBRA continuation coverage, the employee will pay not more than 35% of the COBRA premium for up to nine months.  The employer must provide the remaining 65% of the premium for a period of nine months, or until the employee obtains other coverage.  The employer is entitled to some favorable tax treatment as a result of these payments.   The employer is not required to provide the subsidy for certain high income employees.   By April 13, 2009, employers are required to issue notices to employees it terminated after September 1, 2008.  Model notices are expected from the United States Department of Labor by March 19, 2009.   The Act also imposes a second election period.  If the period to elect COBRA coverage expired before March 1, 2009, the employee has sixty (60) days after receipt of the new notice to elect COBRA coverage.   Antheil Maslow & MacMinn, LLP can provide guidance for employers to ensure compliance with the Act and can assist terminated employees in protecting their rights.  Please call your primary attorney at the Firm, or if you are not presently represented by us, contact Patricia C. Collins, Esq. or Michael A. Klimpl, Esq. at (215) 230-7500 to discuss any questions you have regarding the above issues, your own employment matters or to schedule an appointment.