The Economic Stimulus Package and How It Addresses Cobra Subsidiary

Economic Stimulus Update – COBRA

Yesterday, the stimulus package made it through the Conference Committee and now heads back to the House and Senate for a final vote. The legislation prepared by Congressional staff indicates that the agreement calls for the following with respect to COBRA:
A 65 percent premium subsidy for eligible workers for 9 months.

The Department of Treasury will administer the subsidy through a mechanism that allows employers (or health plans if they administer COBRA benefits) to receive a credit against payroll taxes.

Individuals with annual incomes above $125,000 (single) or $250,000 (couples) would be eligible, but they can be taxed, and subject to a recap of the subsidy.

There is nothing in the summary to indicate that the agreement retains the House 55/10 provision allowing for the extension of COBRA coverage. The 55/10 provision would allow individuals 55 years or older and individuals who were employed 10 years or longer to remain on COBRA until they are eligible for Medicare.

It appears that the March 1st effective date is still intact, but with a 60 day grace period to perform retroactive adjustments. We will continue watching and let you know the outcome, and how it affects your business.

Employee Benefits in Terms Business Owners Can Appreciate

2009 Benefits Guide
This guide allows business owners to see whether your company is maximizing available health care products in the ever-changing world of employee benefits. The approach here is understandable, since the examples are in terms that everyone can relate to—- Ice Cream!

If you are starting from scratch, be sure to implement these strategies over time, rather than all at once. A trusted insurance broker, who is competent and caring, and understands your needs, will make this journey much more fulfilling. Chocolate, Vanilla and Swirl – plus Strawberry! What flavor is right for you? Take a look at the terms below and decide what blend will work for your unique situation.

Chocolate, Vanilla and Swirl – plus Strawberry

Chocolate: You have funds to lure the best and brightest, how do you maximize your dollar?

Vanilla: You want the best protection for your employees at the lowest cost.

Swirl: You need to be creative in what you choose from the Chocolate menu.

Strawberry: You have no interest in offering a real benefits plan, yet you are willing to offer voluntary plans that pass the smell test.

HINT: You can mix and match to make your own Benefits Sundae.

Chocolate. $$$$
- Health plans that maximize both tax advantaged plans and traditional choices. Employer contribution: 75% EE / 50% Dep. (or more)
- Disability plan, employer-paid, with executive carve out, and business overhead protection for key employees.
- Retirement plan, with match, possibly ESOP.
- Life plan, basic life and voluntary; key man life to protect the business.
- Voluntary (employee-paid) plans (accident, specified illness) that are administered through payroll with minimal effort.
Vanilla. $$
- Basic health plan that covers preventive care, catastrophic loss, and some level of day to day expenses. Employer contribution: 50% EE / 0% Dep.
- Ancillary package including dental, vision and life, which could be employee-paid (voluntary or employer-paid).
- Direct deposit voluntarily from employees to IRA, savings or credit union.
Swirl. $$$
- Upgrade health plan dollars from Vanilla program. Offer one traditional copay plan in HMO and PPO, and one maximized tax-advantaged plan. Employer contribution: 75% EE / 25% Dep.
- Add in disability insurance, either employer-paid or voluntary.
- No match 401k, or safe harbor 401k, if owners are profitable.
- Voluntary (employee-paid) plans (accident, specified illness) that are administered through payroll with minimal effort.
Strawberry. $
- Employer contribution: $10
- Access to government-sponsored programs (MediCal, AIM, Health Families) through community specialist contact.
- Offer TeleDoc, and NurseLines telephononic access systems.
- Offer limited medical plans which are NOT major medical, but help for uninsured who cannot be covered by government programs.
- No match 401k, or safe harbor 401k, if owners are profitable.
- Voluntary (employee-paid) plans (accident, specified illness) that are administered through payroll with minimal effort.