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Providing Answers the President Won’t Provide – Does the President Understand What Taxing Insurers Will Do?

September 11, 2009 at 8:24 pm · Filed under Uncategorized ·Tagged , , , , , , , ,

Providing Answers the President Won’t Provide
Does the President Understand What Taxing Insurers Will Do?

Alexandria, VA — Over the weekend Senate Finance Committee Chairman Max Baucus (D-MT) proposed a new tax on health insurance premiums — about $6 billion a year — as a way to help pay for the Democrats’ health care reform legislation.

If anyone wants to know why the government-run public option will be a stacked deck, just look at this proposal.

Any economist will tell you that a $6 billion annual tax would increase private sector health insurers’ administrative costs and eventually filter down in the form of higher premiums. Which, of course, leads to our elected representatives complaining about how much more expensive private health insurance is than some public option run by the government.

Would the public option also pay the tax? Of course not. Would it pay the premium tax that states already assess on health insurers operating in the state? Of course not. Oh, and does the tax apply to all the nonprofit health insurers?

But can’t health insurers just take that tax out of their profits? Despite all the harangues about windfall profits, health insurance is one of the least profitable industries — about 2.2 percent. According to a recent article on CNBC’s Jim Cramer’s The Street, “If business stayed the same during the last three months of 2008, it’s likely that [health insurers'] net income dropped to less than $11.6 billion for the year, compared with $17.1 billion in 2007.” So a $6 billion new tax would cut profits in half, to perhaps a little over 1 percent.

You have to sit back and marvel at the hubris of elected officials complaining about the high price of health insurance even as they consider new taxes on health insurers that would make premiums even higher.

And when even more people who can’t afford the higher prices imposed by the politicians decide to drop their coverage, those same politicians will say: “I told you so; that’s why we need the public option.”

– Merrill Matthews, Executive Director, Council for Affordable Health Insurance

About the Council for Affordable Health Insurance

Founded in 1992, CAHI is a nonprofit, nonpartisan research and advocacy association whose mission is to promote access, affordability and choice in American health care. CAHI’s membership includes health insurance companies (active in the individual, small group, HSA and senior markets), small businesses, physicians, actuaries and insurance producers and brokers.
Website: http://www.cahi.org

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Perils of Obamacare: The Three Big Lies

August 20, 2009 at 10:05 pm · Filed under Uncategorized

In making his case for a government takeover of the US health-care system, President Obama is going far beyond the usual Washington truth-stretching.

Take a look at just a few of the most common claims:

“If you like your current health-care plan, you can keep it.” Even White House spokesmen have said that Obama’s oft-repeated pledge that you can keep your current insurance isn’t meant to be taken literally. The reality is that millions of Americans — perhaps most Americans — will be forced to change insurance plans.

First, the president supports an individual mandate — a requirement that every American buy health insurance. And not just any insurance but insurance that includes all the benefits government thinks you should have. That insurance could be more expensive or include benefits that people don’t want or are morally opposed to, such as abortion services.

And that doesn’t just affect those without insurance today. The bills now before Congress say that while you won’t be immediately forced to switch from your current insurance to a government-specified plan, you’ll have to switch to satisfy the government’s requirements if you lose your current insurance or want to change plans.

Plus, the president supports the creation of a government insurance program that would compete with private insurance. But because this ultimately would be subsidized by American taxpayers, the government plan could keep its premiums artificially low or offer extra benefit.

In the end, millions of Americans would be forced out of the insurance they have today and into the government plan. Businesses, in particular, would have every incentive to dump their workers into the public plan. The actuarial firm the Lewin Group estimates that as many as 118.5 million people, roughly two-thirds of those with insurance today, would be shifted from private to public coverage.

“You will pay less.” The Congressional Budget Office has made it clear that the reform plans now being debated will increase overall health-care costs, yet President Obama on Friday repeatedly said that his reform would reduce costs and save Americans money.

But no matter how many times he says it, the truth is you will pay more — much more — both in higher taxes and in higher premiums.

The final health-care bill is expected to cost more than $1 trillion over the next 10 years. That means much higher taxes, and not just for the wealthy.

If one totals up all the new taxes in the House Democratic health-reform bill — the income surtax, the penalties on businesses and individuals that fail to buy into the government health plan, as well as other fees and taxes — the cost to US taxpayers will top $800 billion. New York City will face marginal tax rates as high as 57 percent.

At a time of rising unemployment and economic stagnation, that is like throwing an anchor to a drowning man.

In addition, the new insurance regulations expected to be part of the final bill are likely to drive up insurance premiums. And, if the new government-run plan under-reimburses doctors and hospitals — as Medicare and Medicaid do — providers would be forced to recoup that lost income by shifting their costs to private insurance, driving up premiums. A study by the Council for Affordable Health Insurance estimates that the president’s proposals could increase premiums by 75 to 95 percent.

“Quality will improve.” Anyone who thinks a government takeover of the health-care system will improve quality of care has only to look at the health-care programs the government already runs: The Veterans Administration is overwhelmed with problems, Medicaid is notorious for providing poor quality at a high cost — and Medicare has huge gaps in coverage.

Worse, however, on Friday, Obama endorsed the creation of a government board with the power to dictate how your doctor practices medicine and all but endorsed the rationing prevalent in nationalized health-care systems around the world.

In short, when it comes to claims about the wondrous new world of government-run health care, a bit of skepticism might be in order.

This article appeared in the New York Post on July 20, 2009 Tanner, Michael D. “Perils of Obamacare: The Three Big Lies.” The Cato Institute. July 20, 2009. 18 Aug 2009 <http://www.cato.org/pub_display.php?pub_id=10367>

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COBRA Health Insurance Continuation Premium Subsidy

June 3, 2009 at 8:27 pm · Filed under Uncategorized ·Tagged , , , , ,

COBRA Health Insurance Continuation Premium Subsidy

The American Recovery and Reinvestment Act of 2009 establishes an employer-provided subsidy for employees who involuntarily lose their jobs. The IRS issued a news release Feb. 26 outlining information for employers. Individuals who qualify for the COBRA subsidy premium should see below for more information.

    Information for Employers

Do you have questions on how to administer the COBRA continuation premium subsidy to former employees? These questions and answers may help.

Employers should use the updated Form 941, Employer’s Quarterly Federal Tax Return, to report their COBRA premium assistance payments.

The Form 941 Instructions explain how to complete lines 12a and 12b, which address the COBRA premium assistance payments.

Additional information may be found in Notice 2009-27, Premium Assistance for COBRA Benefits.

    Information for Employees or Former Employees

Workers who have lost their jobs may qualify for a 65 percent subsidy for COBRA continuation premiums for themselves and their families for up to nine months.

Eligible workers will have to pay 35 percent of the premium to their former employers.

To qualify, a worker must have been involuntarily separated between Sept. 1, 2008, and Dec. 31, 2009. Workers who lost their jobs between Sept. 1, 2008, and enactment, but failed to initially elect COBRA because it was unaffordable, get an additional 60 days to elect COBRA and receive the subsidy.

This subsidy phases out for individuals whose modified adjusted gross income exceeds $125,000, or $250,000 for those filing joint returns. Taxpayers with modified adjusted gross income exceeding $145,000, or $290,000 for those filing joint returns, do not qualify for the subsidy.

More information on the COBRA subsidy is available from the U.S. Department of Labor.

For personal assistance you may also call 317-441-4321 for a Licensed Health Insurance Broker to Walk you through your options.

Or LOGIN HERE for MORE INFORMATION

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COBRA ARRA premium Subsidy Update

May 22, 2009 at 3:26 pm · Filed under Uncategorized ·Tagged , , , , ,

EBSA – COBRA Continuation Coverage Assistance Under The American Recovery And Reinvestment Act Of 2009 for United States Department of Labor. This information has recently been updated, and is now available.
The COBRA ARRA web page has been updated with the application to request the Department’s review of denials of the COBRA premium subsidy under the American Recovery and Reinvestment Act. The application is available at www.dol.gov/ebsa/COBRA/main.html which is the first link, Review of Subsidy Denials, under For Employees. Applicants are encouraged to file their application online. The application can also be printed and faxed or mailed as indicated on the application.

For personal Assistance Regarding this matter call 317-441-4321

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FAQs About COBRA Continuation Health Coverage – For Employers

March 5, 2009 at 9:14 pm · Filed under ARRA, Business, Financial, Insurance, Rule, Stewardship, cobra, enrollment, health ·Tagged , , , ,

FAQs About COBRA Continuation Health Coverage

What is COBRA continuation health coverage?
Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

What does COBRA do?
COBRA contains provisions giving certain former employees, retirees, spouses former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

Which employers are required to offer COBRA coverage?
Employers with 20 or more employees are usually required to offer COBRA coverage and to notify their employees of the availability of such coverage. COBRA applies to plans maintained by private-sector employers and sponsored by most state and local governments.

Who is entitled to benefits under COBRA?
There are 3 elements to qualifying for COBRA benefits. COBRA establishes specific criteria for plans, qualified beneficiaries, and qualifying events:

Plan Coverage – Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA. Both full and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction on an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time.

Qualified Beneficiaries - A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee’s spouse, or an employee’s dependent child. In certain cases, a retired employee, the retired employee’s spouse, and the retired employee’s dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage is considered a qualified beneficiary. Agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries.

Qualifying Events - Qualifying events are certain events that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of continuation coverage.

The qualifying events for employees are:

* Voluntary or involuntary termination of employment for reasons other than gross misconduct
* Reduction in the number of hours of employment

The qualifying events for spouses are:

* Voluntary or involuntary termination of the covered employee’s employment for any reason other than gross misconduct
* Reduction in the hours worked by the covered employee
* Covered employee’s becoming entitled to Medicare
* Divorce or legal separation of the covered employee
* Death of the covered employee

The qualifying events for dependent children are the same as for the spouse with one addition:

* Loss of dependent child status under the plan rules

Under COBRA, what benefits must be covered?
Qualified beneficiaries must be offered coverage identical to that available to similarly situated beneficiaries who are not receiving COBRA coverage under the plan (generally, the same coverage that the qualified beneficiary had immediately before qualifying for continuation coverage). A change in the benefits under the plan for the active employees will also apply to qualified beneficiaries. Qualified beneficiaries must be allowed to make the same choices given to non-COBRA beneficiaries under the plan, such as during periods of open enrollment by the plan.

Who pays for COBRA coverage?
Beneficiaries may be required to pay for COBRA coverage. The premium cannot exceed 102 percent of the cost to the plan for similarly situated individuals who have not incurred a qualifying event, including both the portion paid by employees and any portion paid by the employer before the qualifying event, plus 2 percent for administrative costs.

For qualified beneficiaries receiving the 11 month disability extension of coverage, the premium for those additional months may be increased to 150 percent of the plan’s total cost of coverage.

COBRA premiums may be increased if the costs to the plan increase but generally must be fixed in advance of each 12-month premium cycle. The plan must allow qualified beneficiaries to pay premiums on a monthly basis if they ask to do so, and the plan may allow them to make payments at other intervals (weekly or quarterly).

The initial premium payment must be made within 45 days after the date of the COBRA election by the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event. Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan.

If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage.

If the amount of the payment made to the plan is made in error but is not significantly less than the amount due, the plan is required to notify the qualified beneficiary of the deficiency and grant a reasonable period (for this purpose, 30 days is considered reasonable) to pay the difference. The plan is not obligated to send monthly premium notices.

COBRA beneficiaries remain subject to the rules of the plan and therefore must satisfy all costs related to co-payments and deductibles, and are subject to catastrophic and other benefit limits.

What is the Federal Government’s role in COBRA?
COBRA continuation coverage laws are administered by several agencies. The Departments of Labor and Treasury have jurisdiction over private-sector health group health plans. The Department of Health and Human Services administers the continuation coverage law as it affects public-sector health plans.

The Labor Department’s interpretive and regulatory responsibility is limited to the disclosure and notification requirements of COBRA. If you need further information about ERISA generally, write to the EBSA office nearest where you live. Consult the U.S. Government, U.S. Department of Labor listing in your telephone directory for the office nearest you or call EBSA’s Toll-Free Employee & Employer Hotline number at: 1.866.444.EBSA (3272) and request a list of EBSA offices, or write to:

U.S. Department of Labor
Employee Benefits Security Administration
Division of Technical Assistance and Inquiries
200 Constitution Avenue NW, Suite N-5619
Washington, DC 20210

The Internal Revenue Service, Department of the Treasury, has issued regulations on COBRA provisions relating to eligibility, coverage and premiums in 26 CFR Part 54, Continuation Coverage Requirements Applicable to Group Health Plans. Both the Departments of Labor and Treasury share jurisdiction for enforcement of these provisions.

The Center for Medicare and Medicaid Services offers information about COBRA provisions for public-sector employees. You can write them at this address:

Center for Medicare and Medicaid Services
7500 Security Boulevard
Mail Stop S3-16-26
Baltimore, MD 21244-1850
Tel 410.786.3000

Who can answer other COBRA questions?
COBRA administration is shared by three federal agencies. The U.S. Department of Labor handles questions about notification rights under COBRA for private-sector employees. The Department of Health and Human Services handles questions relating to state and local government workers. The Internal Revenue Service, Department of the Treasury, has other COBRA jurisdiction.

CATALIST FINANCIAL is here as a private resource to help guide you through the maze of options and to what is most prudent for you. you can contact Ben McCann at 317.441.4321 or email ben@catalistfinancial.com or visit our site at www.catalistfinancial.com and for other resources go to www.catalistpartners.ning.com
for help with job seekers in transition or to post job openings or to connect to more local resources in the Indiana Area go to www.catalistjobs.com

For some LINKS and tools in getting INDIVIDUAL HEALTH INSURANCE QUOTES to compare with COBRA rates, CLICK HERE you will have 10 facts followed by some LINKS to carrier quoting tools. NOTE: all quotes are standard or preferred street rates and are subject to underwriting, to get a better idea of what might work for you, it is recommended that you talk to an appointed Health Insurance Agent by Filling out this FORM

More details about COBRA coverage are included in the booklet An Employer’s Guide to Group Health Continuation Coverage Under COBRA – The Consolidated Omnibus Budget Reconciliation Act of 1986. To request a copy, call EBSA toll-free: 1.866.444.EBSA (3272).

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FAQs About COBRA For Workers And Their Families

March 3, 2009 at 6:00 am · Filed under Uncategorized ·Tagged , , , ,

FAQs About COBRA For Workers And Their Families

Q1: I have heard that the Stimulus package signed by the President included a new temporary COBRA premium reduction. I would like more information.
COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985) provides for a temporary extension of employer-provided group health coverage, commonly called COBRA continuation coverage. The American Recovery and Reinvestment Act of 2009 (ARRA) expands eligibility for COBRA continuation coverage and provides a premium reduction to certain qualified individuals.

Individuals who are eligible for COBRA coverage because of an employee�s involuntarily termination of employment that occurred from September 1, 2008 through December 31, 2009 and who elect COBRA, may be eligible to pay a reduced premium amount that is only 35% of the premium for COBRA coverage for up to 9 months. This premium reduction is generally available for continuation coverage provided pursuant to the Federal COBRA provisions, as well as for group health insurance coverage provided pursuant to state continuation coverage laws.

If you were offered Federal COBRA continuation coverage as a result of an involuntary termination of employment that occurred on or after September 1, 2008 and you declined to take COBRA at that time, or elected COBRA and later dropped it, you may have another opportunity to elect COBRA coverage.

Q2: How can I tell if I am eligible to receive the COBRA premium reduction?
To qualify for the COBRA premium reduction, you must:

* Be eligible for COBRA continuation coverage as a result of an involuntary termination of employment at any time from September 1, 2008 through December 31, 2009; and
* Elect COBRA coverage (when first offered or during the additional election period).

If you are eligible for other group health coverage (such as through a spouse’s plan or a new employer�s plan) or for Medicare you are not eligible for the premium reduction. The amount of the premium reduction is recaptured for certain high income individuals. If the amount you earn for the year is at least $125,000 (or $250,000 for married couples filing a joint Federal income tax return), all or part of the amount of the premium reduction may be recaptured by an increase in income tax liability for the year. If you think that your income may exceed the amounts above, consult your tax preparer or contact the IRS at www.irs.gov.

Note: If the employee’s termination of employment was for gross misconduct, the employee and any dependents generally would not qualify for COBRA or the premium reduction.

Q3: My health coverage was terminated when my employer shut down and laid off all its workers. Can I get the premium reduction to pay for new health coverage?
The premium reduction is available to help qualified individuals pay for COBRA continuation health coverage. If there is no longer a health plan, there is often no COBRA coverage available, unless another related or successor employer sponsors a group health plan responsible for providing coverage to you.

If you believe a related or successor employer may be responsible for providing you with COBRA coverage, you can contact the employer directly or EBSA toll free at 1.866.444.3272 to speak to a Benefits Advisor for assistance.

Q4: I was laid off after September 1, 2008, but declined continuation coverage because I could not afford it. Can I enroll in COBRA now and receive the premium reduction?
Generally, yes. For individuals eligible for Federal COBRA continuation coverage, if your qualifying event was an involuntary termination of employment that occurred during the period from September 1, 2008 through February 16, 2009, and are not enrolled in COBRA coverage (because you never elected COBRA or because you elected but later dropped COBRA coverage), you will get a second opportunity to enroll. Your plan is required to notify of you of the second election period by April 18, 2009, after which you have 60 days to enroll in COBRA coverage with the premium reduction.

For individuals eligible for State continuation coverage (such as state �mini-COBRA�), your state may chose but is not required to provide a second election period.

Q5: How do I apply for the premium reduction?
If you were covered by an employment-based health plan on the last day of the employee�s employment, the plan should provide you a notice of your eligibility to elect COBRA and to receive the premium reduction. These materials should include any forms necessary for enrollment. You may also want to contact your plan directly to ask about taking advantage of the premium reduction.

Q6: I am enrolled in COBRA coverage with my health plan and am paying premiums. If I am eligible for the premium reduction, will I receive a refund of 65% of all the premiums that I have paid since September 2008?
No. The premium reduction provisions apply only to premiums for coverage periods beginning on or after February 17, 2009. If you were eligible for the reduction but paid in full for periods of COBRA coverage beginning on or after February 17, 2009, you should contact the plan administrator or employer sponsoring the plan to discuss a credit against future payments (or refund in certain circumstances).

Q7: If I am eligible for the premium reduction, how long will it last?
Your premium reduction can last up to 9 months. However, it will end earlier if:

1. You become eligible for Medicare or another group health plan (such as a plan sponsored by a new employer or a spouse�s employer), or
2. You reach the end of your maximum COBRA coverage period.

If you plan to continue your COBRA coverage after the premium reduction period, you will have to pay the full amount of the premium. Failure to do so may result in your loss of COBRA coverage.

Individuals paying reduced COBRA premiums must notify their plans if they become eligible for coverage under another group health plan or Medicare. Failure to do so can result in a tax penalty.

Q8: I am currently enrolled in COBRA continuation coverage, but would like to switch to a different coverage option offered by my former employer. Can I do this?
Group health plans are permitted, but not required, to allow qualified beneficiaries to enroll in coverage that is different than the coverage they had at the time of the qualifying event. ARRA provides that changing coverage will not cause an individual to be ineligible for the COBRA premium reduction, provided that:

* The premium for the different coverage is the same or lower than the coverage the individual had at the time of the qualifying event;
* The different coverage is also offered to active employees; and
* The different coverage is not limited to only dental coverage, vision coverage, counseling coverage, a flexible spending account, or an on-site medical clinic.

If the plan permits individuals to change coverage options, the plan must provide the individuals with a notice of their opportunity to change. Individuals have 90 days to elect to change their coverage after the notice is provided.

Q9: What can I do if my former employer�s group health plan denies my application for a the premium reduction?
If the plan determines that you are not eligible for the premium reduction, you can request an expedited review of the denial. The Department of Labor will handle appeals related to private sector employer plans who are subject to ERISA�s COBRA provisions. The Department of Health and Human Services will handle appeals for Federal, State, and local governmental employees, as well as appeals related to group health insurance coverage provided pursuant to state continuation coverage laws. The Departments are required to make a determination regarding your appeal within 15 business days after receiving your completed application for review. [Note: Appeals to the Department of Labor must be submitted on a U.S. Department of Labor application form. The form will soon be available at www.dol.gov/COBRA and can be completed online or mailed or faxed as indicated in the instructions.] If you believe you have been inappropriately denied eligibility for the premium reduction, you may wish to speak with an Employee Benefits Security Administration Benefits Advisor at 1.866.444.3272 before filing this form.

Q10: How can I get more information on my eligibility for COBRA or the premium reduction?
Visit the Department of Labor�s Web site at www.dol.gov/COBRA for information related to COBRA eligibility and the premium reduction. Benefits Advisors are also available to assist you at 1.866.444.3272.

CATALIST FINANCIAL is here as a private resource to help guide you through the maze of options and to what is most prudent for you. you can contact Ben McCann at 317.441.4321 or email ben@catalistfinancial.com or visit our site at www.catalistfinancial.com and for other resources go to www.catalistpartners.ning.com
for help with job seekers in transition or to post job openings or to connect to more local resources in the Indiana Area go to www.catalistjobs.com

For some LINKS and tools in getting INDIVIDUAL HEALTH INSURANCE QUOTES to compare with COBRA rates, CLICK HERE you will have 10 facts followed by some LINKS to carrier quoting tools. NOTE: all quotes are standard or preferred street rates and are subject to underwriting, to get a better idea of what might work for you, it is recommended that you talk to an appointed Health Insurance Agent by Filling out this FORM

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What you need to know about COBRA and the ARRA

March 2, 2009 at 8:16 pm · Filed under Uncategorized ·Tagged , , , ,

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% reduction in COBRA premiums for certain assistance eligible individuals for up to 9 months. An assistance eligible individual is a COBRA �qualified beneficiary� who meets all of the following requirements:

* Is eligible for COBRA continuation coverage at any time during the period beginning September 1, 2008 and ending December 31, 2009;
* Elects COBRA coverage (when first offered or during the additional election period), and
* Has a qualifying event for COBRA coverage that is the employee�s involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. Other limitations may also apply. There is no premium reduction for periods of coverage that began prior to February 17, 2009.

Individuals who request treatment as an assistance eligible individual and are denied such treatment by their group health plan may have the right to appeal to the Department. The Department is currently developing a process and an official application form that will be required to be completed for appeals.

EBSA is actively working to issue additional guidance regarding the COBRA premium reductions.

Please subscribe to this page for notification of updates as guidance and educational information and tools are added. You can also contact a Benefits Advisor by calling toll free 1.866.444.3272 for more information.

click here for more
http://www.dol.gov/ebsa/COBRA.html

HERE ARE SOME QUICK FACTS ABOUT COBRA & ARRA:

Source: U.S. Department of Labor
Employee Benefits Security Administration
February 26, 2009

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.

COBRA

COBRA gives workers who lose their jobs, and thus their health benefits, the right to purchase group health coverage provided by the plan under certain circumstances.

If the employer continues to offer a group health plan, the employee and his/her family can retain their group health coverage for up to 18 months by paying group rates. The COBRA premium may be higher than what the individual was paying while employed but generally the cost is lower than that for private, individual health insurance coverage.

The plan administrator must notify affected employees of their right to elect COBRA. The employee and his/her family each have 60 days to elect the COBRA coverage, otherwise they lose all rights to COBRA benefits.

Note: COBRA generally does not apply to plans sponsored by employers with less than 20 employees. Many States have similar requirements for small plans providing benefits through an insurance company. The premium reduction is available for plans covered by these State laws.

Changes Regarding COBRA Continuation Coverage Under ARRA

Premium Reduction: The premium reduction for COBRA continuation coverage is available to “assistance eligible individuals”.

An “assistance eligible individual” is the employee or a member of his/her family who:

* is eligible for COBRA continuation coverage at any time between September 1, 2008 and December 31, 2009;
* elects COBRA coverage; and
* is eligible for COBRA as a result of the employee’s involuntary termination between September 1, 2008 and December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. There is no premium reduction for premiums paid for periods of coverage prior to February 17, 2009.

ARRA treats assistance eligible individuals who pay 35 percent of their COBRA premium as having paid the full amount. The premium reduction (65 percent of the full premium) is reimbursable to the employer, insurer or health plan as a credit against certain employment taxes. If the credit amount is greater than the taxes due, the Secretary of the Treasury will directly reimburse the employer, insurer or plan for the excess.

The premium reduction applies to periods of coverage beginning on or after February 17, 2009. A period of coverage is a month or shorter period for which the plan charges a COBRA premium. The premium reduction starts on March 1, 2009 for plans that charge for COBRA coverage on a calendar month basis. The premium reduction for an individual ends upon eligibility for other group coverage (or Medicare), after 9 months of the reduction, or when the maximum period of COBRA coverage ends, whichever occurs first. Individuals paying reduced COBRA premiums must inform their plans if they become eligible for coverage under another group health plan or Medicare.

Special COBRA Election Opportunity: Individuals involuntarily terminated from September 1, 2008 through February 16, 2009 who did not elect COBRA when it was first offered OR who did elect COBRA, but are no longer enrolled (for example because they were unable to continue paying the premium) have a new election opportunity. This election period begins on February 17, 2009 and ends 60 days after the plan provides the required notice. This special election period does not extend the period of COBRA continuation coverage beyond the original maximum period (generally 18 months from the employee’s involuntary termination). COBRA coverage elected in this special election period begins with the first period of coverage beginning on or after February 17, 2009. This special election period opportunity does not apply to coverage sponsored by employers with less than 20 employees that is subject to State law.

Notice: Plan administrators must provide notice about the premium reduction to individuals who have a COBRA qualifying event during the period from September 1, 2008 through December 31, 2009. Plan administrators may provide notices separately or along with notices they provide following a COBRA qualifying event. This notice must go to all individuals, whether they have COBRA coverage or not, who had a qualifying event from September 1, 2008 through December 31, 2009.

Individuals eligible for the special COBRA election period described above also must receive a notice informing them of this opportunity. This notice must be provided within 60 days following February 17, 2009.

Expedited Review of Denials of Premium Reduction: Individuals who are denied treatment as assistance eligible individuals and thus are denied eligibility for the premium reduction (whether by their plan, employer or insurer) may request an expedited review of the denial by the U.S. Department of Labor. The Department must make a determination within 15 business days of receipt of a completed request for review. The Department is currently developing a process and an official application form that will be required to be completed for appeals.

Switching Benefit Options: If an employer offers additional coverage options to active employees, the employer may (but is not required to) allow assistance eligible individuals to switch the coverage options they had when they became eligible for COBRA. To retain eligibility for the ARRA premium reduction, the different coverage must have the same or lower premiums as the individual�s original coverage. The different coverage can not be coverage that provides only dental, vision, a health flexible spending account, or coverage for treatment that is furnished in an on-site facility maintained by the employer.

Income limits: If an individual�s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $145,000 (or $290,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid. For taxpayers with adjusted gross income between $125,000 and $145,000 (or $250,000 and $290,000 for joint filers), the amount of the premium reduction that must be repaid is reduced proportionately. Individuals may permanently waive the right to premium reduction but may not later obtain the premium reduction if their adjusted gross incomes end up below the limits. If you think that your income may exceed the amounts above, consult your tax preparer or contact the IRS at www.irs.gov.

This fact sheet has been developed by the U.S. Department of Labor, Employee Benefits Security Administration, Washington, DC 20210. It will be made available in alternate formats upon request: Voice phone: 202.693.8664; TTY: 202.501.3911. In addition, the information in this fact sheet constitutes a small entity compliance guide for purposes of the Small Business Regulatory Enforcement Fairness Act of 1996.

CATALIST FINANCIAL is here as a private resource to help guide you through the maze of options and to what is most prudent for you. you can contact Ben McCann at 317.441.4321 or email ben@catalistfinancial.com or visit our site at www.catalistfinancial.com and for other resources go to www.catalistpartners.ning.com
for help with job seekers in transition or to post job openings or to connect to more local resources in the Indiana Area go to www.catalistjobs.com

For some LINKS and tools in getting INDIVIDUAL HEALTH INSURANCE QUOTES to compare with COBRA rates, CLICK HERE you will have 10 facts followed by some LINKS to carrier quoting tools. NOTE: all quotes are standard or preferred street rates and are subject to underwriting, to get a better idea of what might work for you, it is recommended that you talk to an appointed Health Insurance Agent by Filling out this FORM

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Strategies for Business Owners – A Summary

January 14, 2009 at 5:27 pm · Filed under Business, Buy/Sell Agreement, Estate Planning, Financial, Insurance, Life Insurance, Section 162, Succession Planning, Trusts, Uncategorized ·Tagged , , , , , , , , , , , , , , , , , , ,

Life insurance can meet business needs as well as personal needs. When the business is the largest asset of an owner’s estate, life insurance becomes a major planning tool. Continuation of the business after death, replacement of key employees, equalization of inheritance for heirs not interested in the business, or the buyouts of other business partners become major estate planning concerns.

There are many strategies to assist business owners to meet these estate-planning concerns. Below is a summary outlining three such strategies: the Key Person Insurance, a Section 162 Executive Bonus plan, and the Buy-Sell Agreement. (For further details, please ask for specific information.)
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I DO NOT GIVE LEGAL, TAX, OR ESTATE PLANNING ADVICE. THE INFORMATION GIVEN HERE REFLECTS OUR UNDERSTANDING OF CURRENT LAWS AND REGULATIONS. THESE STRATEGIES MAY NOT BE APPROPRIATE FOR ALL. BUSINESS OWNERS AND PROSPECTIVE CLIENTS SHOULD ALWAYS CONSULT THEIR LEGAL, TAX, OR ESTATE PLANNING ADVISOR(S) ON THEIR SPECIFIC SITUATION.

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Hello world!

January 14, 2009 at 5:01 pm · Filed under Uncategorized

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!

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