COBRA, ARRA and IT

A rash of calls recently from clients with a common question brings about this post.

If you have an employee who does not return to work after a leave of absence, and that employee is considered terminated from employment when that occurs, then the employee is entitled, according to the U.S. Department of Labor, to elect the COBRA premium subsidy as provided by the ARRA.

And yes, IRS Notice 2009-27 does state, "An involuntary termination means a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services." While the "willing and able to continue performing services" appears to conflict with a situation facing an employee who does not return from a leave of absence, nonetheless, the employee is an assistance eligible individual.

[UPDATED] A gentle reminder. . .

Hey, where have you been? Okay, okay--it's more like where have we been. Sorry for the lack of posts in the month of February.

This is a quickie: remember that if you are not covered by federal COBRA (20 or more employees), you may still have obligations under your respective state's "mini-COBRA" law. For example, in Tennessee, employees can get three months of health insurance continuation if their employer is not covered by federal COBRA.

One other quickie: the federal COBRA subsidy that was in effect under the American Recovery and Reinvestment Act expired on February 28, 2010. The President and Congress have implemented a stop-gap measure extending the subsidy to March 31, 2010--the Temporary Extension Act of 2010.