David Kirkpatrick

April 16, 2009

COBRA backgrounder

Here’s a good, easy to follow backgrounder on COBRA. I’ve recently blogged on this topic based on an article I wrote for WeCompareInsurance.com.

From the first link:

The American Recovery and Reinvestment Act, commonly known as the stimulus package, created a significant amount of work for employee benefits professionals with its recent COBRA changes. ARRA creates a federal 65% subsidy for COBRA insurance for individuals who involuntarily lost or will lose their jobs between Sept. 1, 2008 and Dec. 31, 2009.

For example, if the monthly cost of COBRA coverage is $1,000, and employees are responsible for the full premium, under the subsidy, the employee will only be required to pay $350 each month for COBRA coverage, with a federal subsidy of $650.

How it works

The mechanics of the subsidy are interesting. Employers will receive a credit on their payroll tax returns for the federal subsidy. For example, if the federal subsidy is $650, and employee pays $350 for COBRA coverage, the employer will receive a credit of $650 on its federal withholding tax returns (i.e., Form 941).

For employers with more than 20 employees, these procedures will apply whether a plan is fully insured or self-insured. However, workers at small firms, who are not normally eligible for COBRA coverage, still will be entitled to the federal subsidy if state-mandated coverage is comparable to COBRA. However, in these circumstances, the insurance carrier, and not the employer, will be the entity responsible for providing the subsidy and taking the payroll tax credit.

The COBRA subsidy only lasts for a maximum of nine months. When COBRA rights are cut off, the subsidy ends. For example, if an employee receives new employment with a one-month waiting period, when the employee becomes eligible for new coverage, the COBRA subsidy ends. It is the responsibility of employees to notify employers when new coverage exists.

If an employer denies the employee the federal subsidy, there is an appeals procedure with the Department of Labor and the Department of Health and Human Services. It is likely that disputes will exist with regard to employees who fail to return to employment following a period of FMLA leave or other leave of absence and consider themselves to be terminated. In many of these situations, the employer will consider the employee to have voluntarily abandoned their position when they fail to return to work following the expiration of an approved leave of absence. Clarification regarding the definition of involuntary termination is expected.

February 22, 2009

Health insurance benefits laws from EBSA

Here’s a quick listing of employer-based health insurance benefits law from the Department of Labor’s Employee Benefits Security Administration. This article was written for insurance quote aggregator, WeCompareInsurance.com.

From the link:

Health Insurance Benefit Laws


Once you’re done comparing health insurance quotes and plans and you’ve settled on employer-based health insurance, it’s good to keep in mind the Department of Labor’s Employee Benefits Security Administration (EBSA) administers a number of laws that cover these health insurance plans.

Here is a list of some of the laws affecting health insurance:

  1. The Employee Retirement Income Security Act – This law protects people in retirement, health and other benefit plans through private employers by providing rights to information and a grievance and appeals process for private employer health insurance participants.
  2. The Consolidated Omnibus Budget Reconciliation Act – This law only applies to special instances, but if you qualify as a former employee, retiree, spouse or dependent child you can purchase a temporary continuation of health insurance at group rates.
  3. The Health Insurance Portability and Accountability Act – This law applies to working Americans and families with preexisting medical conditions. Through this act there is a guarantee of individual health insurance policies for eligible people and it prohibits discrimination in health care coverage.
  4. The Newborns’ and Mothers’ Health Protection Act – Just as it sounds, this law offers rules on minimum health insurance coverage on how long the mother and child can stay in the hospital after childbirth.
  5. Mental Health Parity Act – This law ensures mental health is given as much emphasis as physical health by requiring annual, or lifetime, limits on mental health benefits to be no lower than limits for medical and surgical benefits provided by a group health insurance plan.
  6. Women’s Health and Cancer Rights Act – Breast cancer is a frightening diagnosis and treatment runs a wide range of intensity and invasiveness. This law protects breast cancer patients who want to have a breast reconstruction after a mastectomy.

When you are part of an employer-based health insurance plan the Department of Labor’s Employee Benefits Security Administration is a great source of information on subjects such as your rights to information on how your plan works, how to quality benefits available in your plan and how to make claims on your health insurance plan.

Remember EBSA administers these laws that help protect your health insurance when you lose coverage, change jobs or if you suffer from certain special medical conditions. Also remember when choosing employer-based plans to carefully compare your health insurance options to make sure your plan works best for you and your family’s medical needs.

Find out more about EBSA on the web at www.dol.gov/ebsa

January 9, 2009

Unemployment going up

Filed under: Business, Politics — Tags: , , — David Kirkpatrick @ 3:23 pm

Man, this is a Friday full of cheer. If nothing else, it’ll make you want to hit a bar ASAP.

More people are out of work and that is now an official trend..

From the link:

The number of laid-off U.S. workers who are continuing to draw unemployment checks jumped more than expected to 4.6 million at the end of December and is likely to keep climbing this year _ fresh evidence that Americans are finding it increasingly difficult to get a new job amid a deepening recession.

The Labor Department’s report Thursday also said first-time applications for jobless benefits dropped to 467,000 last week. But economists largely described that decline as a distortion, reflecting the government’s difficulty in making seasonal adjustments over the holiday period. Even with the dip, the figure still signaled trouble in the labor market. A year ago, initial claims stood at 330,000.

Persistent economic woes _ housing, credit and financial crises _ along with a flurry of layoffs announcements in the opening days of 2009 all point to another terrible year for jobseekers, economists said.

The government’s report showed that the number of people continuing to collect unemployment benefits rose by a sharp 101,000 to 4.6 million for the week ending Dec. 27, the most recent period for which that information is available. It was worse than the 4.5 million level of claims that economists had expected.

January 2, 2009

No economic respite in sight

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 7:57 pm

Of course this what everyone is expecting. I’ve blogged this phrase more than twice, but it bears repeating — everyone with a real dog in the fight right now is saying just write 2009 off, ride it out as best you can and hope for some clarity in 2010.

This doesn’t necessarily mean sour faces and cardboard shoes — sometimes tough times aren’t nearly so bad when you’re prepped for them. It’s the unseen haymaker that really hurts. So stiff upper lip, watch the wanton spending and don’t panic. Things will be better, and I bet they’ll be practically fine. Especially when viewed through rose-colored glasses.

From the link:

The number of laid-off workers continuing to draw unemployment benefits bolted to 4.5 million in late December, and even more Americans are expected to join the ranks of the jobless in 2009.

While first-time applications for jobless benefits dropped last week, economists mostly attributed that to the Christmas holiday and cautioned that a more accurate picture of new layoff filings won’t become clear until the holiday season is passed _ around mid-January.

All in all, though, the picture that emerged Wednesday was largely grim and is not expected to improve any time soon.

“It wasn’t a very merry Christmas for most of the labor force and it doesn’t look like it will be a very happy New Year, either,” said Richard Yamarone, economist at Argus Research.

The Labor Department’s report showed that people continuing to draw unemployment benefits jumped by 140,000 to 4.5 million for the week ending Dec. 20, the most recent period for which that information is available. The larger-than-expected increase underscored the difficulties the unemployed are having in finding new jobs.

September 5, 2008

Jobless rate hits five-year high

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 7:56 am

Keeping to the adage of releasing bad news on a Friday, the latest Department of Labor report shows an unemployment rate of 6.1%. This economy is truly frightening. Yes, things are getting better in ways, but all-in-all its so volatile and all over the map that there’s no way of predicting any possible outcome over the short term.

The average person (read: voter in this election year) is still huring with no real relief in sight. Not a good sign for the GOP, I’d say.

From the NYT link:

The government says the nation’s unemployment rate zoomed to a five-year high of 6.1 percent in August as employers slashed 84,000 jobs.

It’s dramatic proof of the damage a deeply troubled economy is inflicting on workers and businesses.

The Labor Department’s report, released Friday, shows the jobless rate jumped to 6.1 percent in August, from 5.7 percent in July. And, employers cut payrolls for the eighth month in a row. The figures are worse than economists were expecting; they were forecasting the jobless rate to rise to 5.8 percent and a loss of 75,000 jobs.

April 7, 2008

Massive job loss one more recession red flag

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:24 pm

I’ve posted on the US recession in the past. Here’s a story from AccountantsWorld.com (free registration req.) on March’s massive job loss being one more signal a recession is here and looks to be significant.

There’s no reason to go around preaching doom-and-gloom, but it is important to be realistic about the current economic situation. Something the administration in DC has had some measure of difficulty with.

From the second link:

It is no longer a question of recession or not. Now it is how deep and how long.

Workers’ pink slips stacked ever higher in March as jittery employers slashed 80,000 jobs, the most in five years, and the national unemployment rate climbed to 5.1 percent. Job losses are nearing the staggering level of a quarter-million this year in just three months.

For the third month in a row total U.S. employment rolls shrank _ often a telltale sign that the economy has jolted dangerously into reverse.

At the same time, the jobless rate rose three-tenths of a percentage point, a sharp increase usually associated with times of deep economic stress.

The grim picture described by the Labor Department on Friday provided stark evidence of just how much the jobs market has buckled under the weight of the housing, credit and financial crises. Businesses and jobseekers alike are feeling the pain.

“It is now very clear that the fat lady has sung for the economic expansion. The country has slipped into a recession,” said Stuart Hoffman, chief economist at PNC Financial Services Group. Indeed, there is widening agreement that the first recession since 2001 has arrived. Even Ben Bernanke, in a rare public utterance for a Federal Reserve chairman, used the “r” word, acknowledging for the first time this week that a recession was possible.