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

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West Palm Beach-based notified furloughed employees by letter as required by changesa in the Consolidated Omnibu s BudgetReconciliation Act. The changes to COBRqA were a mandate of the American Recover andReinvestment Act, which President Barack Obama signef into law on Feb. 17. Abourt 125 South Floridians – out of 1,03r who were notified – enrolled in the program that provides a 65 percentf federal subsidyon premiums, whicn are fronted by the employer and reimbursex through a tax credit. More applied, but did not qualify because their exit from their former companywas voluntary, they were laid off prio to Sept.
1, 2008, or they made more moneyg than the cap federalofficials set, said Barbarsa Drames, Oasis’ senior director of benefits. Oasis absorbs the cost for itsemployef clients, which would otherwise have been spending $74,000 a monty on furloughed COBRA coverage, she said. Drames’ clienf companies – which include law and CPA firms, and those that make moneyu fromhospitality – range in size from five employees to 3,00p0 employees.
She said the feedbacl from laid-off employees has been very but there is a lot of confusion aboutwho Oasis’ client companies are also “Our employers are happy because the tax liability is taken on by Oasis,” she The new regulations require employerx with 20 or more employees to cove r 65 percent of COBRA costs for nine months. The provisions in the stimulusd legislation affect those who were and will be involuntarily terminateddbetween Sept. 1, 2008, and Dec. 31, 2009. Thoswe eligible include former employees and their the latter being eligible if they were coverer prior tothe termination, said Rachel president and CEO of in Miami.
Therew is no subsidy for individuals earning morethan $145,0090 a year or joint filers making more than Ineligible individuals who receive the subsiduy must repay it through incom taxes. For Sapoznik, the response from the pool of prospectiver COBRA recipients has been highert than thatof Oasis, but stilk weaker than most expected. She said about 20 percen t of those who were deemed eligiblehave enrolled. She said because those eligible have 60 days from the time they receiver the lettersto participate, there may be anothet wave of enrollment. Those with a cash in higher-paying jobs, are also likelier to take COBRA.
Those who are eligiblre but have not enrollef are probably waiting for various reasones that include seeing if a job application turnss into anew job, if they can be coveref through another insurance plan (such as that of a and weighing the financial impact enrollment will have on the familgy budget, said Dick Leonard, senior VP of employee benefitds for ’ Southeast region. it seems like people are plaincutting back,” he said of the hard realityt of the financial environment.
“You have to take into accountg that they still have to pay the deductable and meetmiscellaneous