"I don't want to pretend that today marks the end of our economic problems, nor does it constitute all of what we're going to have to do to turn our economy around," said Obama, who signed the bill at the Denver Museum of Nature & Science, underscoring its hope of creating environmentally-friendly jobs.
"But today does mark the beginning of the end; the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; the beginning of what we need to do to provide relief for families worried that they won't be able to pay next month's bills; the beginnings of the first steps to set our economy on a firmer foundation, paving the way to long-term growth and prosperity." Read the full Boston Globe story.
The stimulus plan contains specific measures that will effect most businesses across the country, including a COBRA subsidy for laid-off workers, hiring incentives and new HR requirements.
Roughly $21 billion of the stimulus package is available to help workers who have been laid off to keep their employer-provided health insurance through COBRA, the federal law that gives unemployed workers the right to maintain their employer health insurance after a layoff.
The federal government will pay 65 percent of COBRA premiums for a period of nine months for employees who are laid off from September 1, 2008 through December 31, 2009. Employers will receive a payroll tax credit to offset the subsidy. Employers must notify former employees who are eligible for the new subsidy by March 1.
Documents will have to be updated as the new rule requires that information on the COBRA subsidy is to be included in employers' COBRA notices.
The stimulus also outlines tax benefits for hiring certain types of workers. If your company hires an unemployed military veteran or a person who didn’t finish high school, you could receive a $2,400 per employee tax credit as part of the Work Opportunity Tax Credit. The two new classes of qualified workers were added to the “target group” of disadvantaged workers.
Other HR requirements included in the stimulus plan:
- An increase of weekly unemployment benefits by $25.
- An extension of the temporary emergency unemployment compensation program through December 2009. The program provides up to 33 weeks of extended unemployment benefits.
- Unemployment compensation to workers who leave an employer for "compelling family reasons," such as domestic violence, illness or disability of an immediate family member.
As the Department of Labor releases more information on the compete details of the stimulus plan and what will be required of businesses, G.Neil's legal team will be there to help make sure your organization is fully compliant.
Please check back often or subscribe to our blog for the latest updates on how the stimulus plan impacts your business.
For more on how the stimulus package will impact your business, read:
USA Today - Employers fear cost of health insurance for jobless workers
HR Morning - Obama stimulus package contains 6 big paperwork changes for you
Boston Globe - Stimulus is signed as storm builds
About.com: Human Resources - Economic stimulus package and COBRA
Posts
9 comments:
Actually, employers have to pay the 65-percent portion and then apply for a tax credit as much as a year later. The IRS has 30 days to figure out how this is going to work; meanwhile, employers will be writing hefty checks.
Get Off My Back - Sorry if we weren’t clear on that point. Once an employee pays their 35% share of COBRA premium payments, employers must front the money for the remaining 65%. Employers will pay the insurer directly, then claim it as an offset against payroll tax liabilities. Payroll will then report any subsidies and take the offset on an updated Form 941 that the IRS will soon release.
Do you know if this also applies to employees that leave as opposed to being laid off. They are still entitled to maintain their Cobra benefits but I was wondering if they would only be required to pay 35 percent of the cost.
This COBRA benefit is only available to individuals who involuntarily left/leave employment between September 1, 2008 and December 31, 2009. It does not apply to employees who voluntarily leave.
does "involuntarily left" include actually being fired as well as the elimination of the position?
If you eliminated a position and terminated the employee, the employee is eligible for COBRA.
is it necessary to apply through the government for this in any way, or can it begin immediately upon my first initial COBRA payment directly through my previous employer? i only pay the 35% portion?
If you were covered by an employment-based health plan on the last day of your job, your employer should send you a notice of your eligibility to elect COBRA coverage and to receive the premium reduction. You do not have to apply through the government. The notice sent by your employer will include any forms necessary for enrollment through your employer. You may also want to contact your employer directly to ask about getting the premium reduction. You will only need to pay the amount that is 35% of what you would otherwise pay for your COBRA coverage. This premium assistance only applies to individuals who were terminated from employment between September 1, 2008 - December 31, 2009 and only for COBRA coverage starting on February 17, 2009.
Will the Cobra Stimulus be extended
past nine months?
thanking you in advance
Post a Comment