HR Administration

Dear Workforce How Do COBRA Changes Affect Companies That Fall Below the Employee Limit

By Staff Report

Sep. 7, 2011

Dear Small Bites:

The COBRA subsidy does affect companies not currently governed by federal COBRA regulations, but only if there is a comparable state COBRA-type law and the plan is insured. Currently, 40 states have COBRA-type mandates. The insurer, rather than the employer, will be responsible for paying and being reimbursed for the subsidy.

 

If your company downsized, for the remainder of 2008 you will be subject to COBRA because COBRA applies to employers that normally employed at least 20 employees on at least 50 percent of its typical business days during that year. If you do not hire any additional employees during at least 50 percent of 2009, you will not be subject to the federal COBRA laws in 2009. However, you will remain obligated to provide COBRA coverage to anyone who had a qualifying event in 2008, and, if you plan is insured, the insurer may be subject to state continuation coverage laws.

SOURCE: Chantel Sheaks, Buck Consultants, Washington, and Richard Stover, Buck Consultants, Secaucus, New Jersey

LEARN MORE: Tool: Resources for Keeping Up With COBRA Changes; new COBRA guidelines from the Internal Revenue Service clarify key questions for employers.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Ask a Question

Dear Workforce Newsletter

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

HR Administration

Policy management: What is it and what does it look like for HR?

Summary Policy management involves the creation and maintenance of administrative procedures and guidel...

hr policy, policy automation, policy management

workforce blog

Compliance

Minimum Wage by State in 2022 – All You Need to Know

Summary The federal minimum wage rate is $7.25, but the rate is higher in 30 states, along with Washing...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

HR Administration

Rest and lunch break laws in every US state

Summary Federal law does not require meal or rest breaks Some states have laws requiring meal and rest ...