Revised tax bill does not include COBRA subsidy extension

For immediate release - June 28, 2010

For more information, contact Michelle Pedzich at 585-381-8340 ext. 123

A revised tax bill released on June 16, 2010 does not include an extension of federal COBRA premium subsidies, further decreasing the likelihood that the COBRA subsidy will be extended. 

The senate in a previous tax bill up for consideration recommended extending the subsidy to employees laid off through the end of the year, however the House in May removed the subsidy provision due to its projected cost of nearly $8 billion before passing it and sending it back to the Senate to vote on. There was also been some discussion that the COBRA subsidy would be extended to November 30th, but this amendment to the tax bill has not yet been taken up by the Senate. At this time the 15-month, 65 percent subsidy is not available to employees involuntarily terminated or laid off after May 31, 2010.

Employers are continued to be challenged as to what version of the COBRA paperwork they should provide to departing employees due to the many changes in the regulations. For assistance with compliance issues surrounding COBRA, please feel free to contact us at HR Works.

Sources: Workforce Management, June 22, 2010

HR Works, Inc., located at 246 Willow Brook Office Park in Fairport (Rochester), New York, is a human resource management outsourcing and consulting firm serving more than 700 clients. HR Works provides benefits administration outsourcing; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; affirmative action programs; compensation programs; training of managers and HR professionals; and HRIS and self-service technology.