NEWS, EVENTS, PUBLICATIONS & EMERGING ISSUES

SW&M EMERGING ISSUE
April 8, 2009

REMINDER! – COBRA NOTICES MUST BE ISSUED TO CERTAIN EMPLOYEES BY APRIL 18, 2009

In February 2009, Congress made several important changes to COBRA in an effort to make health care more affordable to employees who have recently lost their jobs during the economic crisis. Whereas employees who lost group health coverage used to bear the entire cost of COBRA premiums themselves, generally, the new rules allow employees who were terminated or laid off on or after September 1, 2009 to continue health care coverage through COBRA by paying only 35% of their premiums for up to 9 months. The remaining 65% must be paid by employers, who will then be entitled to an equal credit on their federal employment tax filings. Among other things, the new amendments to COBRA impose new notice requirements, reimbursement procedures, and change the administration of payroll tax returns.

If your Credit Union has conducted reductions in force ("RIF’s") or other layoffs since September 1, 2008, you should be aware of the April 18, 2009 deadline to notify ex-employees who lost group health coverage that, if they declined or dropped COBRA coverage since the time of their termination, they may still be eligible to elect COBRA with the 65% subsidy.

For more information regarding notice contents and other complex COBRA provisions, contact SW&M.

SW&M distributed a newsletter to our Client Pool on this topic in March 2009. Missed it? Contact us for another copy, or click here to join SW&M’s Client Pool to get timely updates on how the latest NCUA Rules and Regulations, DFI Regulations, and state and federal legislation affect your Credit Union.

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