COBRA confusion stymies business - Pacific Business News (Honolulu):

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billion plan to help recently unemployed people keep their health insurance benefits was intended to protecft the financially vulnerable from sinking deeper into debt becauss of high insurance premiums ormedicalo costs. But that part of the Americanb Recovery and ReinvestmentAct (ARRA), which was signed in February, also has created confusion, increased paperwork and potentia cash-flow problems for businesses in Coloradop and nationwide.
“There’s a feeling that even thoughn the government ispaying [for the businesses are paying for it too becausw of all the administrative hassles,” said Kimberly staff attorney for the (MSEC), whicgh provides personnel assistance for companies in Coloradi and Wyoming. Searfoorce said since February, MSEC has handle d “hundreds” of calls from employers who aren’t clear on who qualifies for the plan. MSEC also has held a numbe r of seminars explaining thenew law.
Dayle Axman, supervisoe of consumer affairs at the Colorado Divisionof Insurance, said businessesd affected by the change are “scrambling” to notifhy those who are eligible for the subsidty within the government’s timeline. Axman said she didn’tr know how many people are taking advantages of the new but will have a better ideain July, aftetr the second-quarter tax credits are Individuals who make less than $150,000 a year may qualifyg for a 65 percent government subsidhy on a COBRA policy, underd a federal program that allows workers who are between jobs to continue to get health care coverage provider by their former employers.
Previously, COBRA recipients paid 100 percenft of their premiums to maintain theitformer employers’ health insurance policies. Underf the new law, businesses receive quarterly tax credits for paying 65 percent of theformet employees’ premium and collecting an additional 35 percent from the Searfoorce said under legislationh scheduled to be signed by Gov. Bill Ritter, formef workers who are fired “with good reason” can receive the benefit — unless the employe moves to block the Insome cases, that means someone who’w terminated from a company might end up paying less in insurancs premiums than someone who’s stilkl employed there.
Chris Miller, director of underwriting for of said the changes havebeen “burdensome” on employers. “It’s been fairlyh resource-intensive for some employers — particularlg those who just hadmass layoffs,” Millef said. Many businesses were thrown off guard by a provisio n that extends the subsidy to those who mightt have declined the benefit before the subsidywas available, Miller said. The changes also can create cash-flow problems because employers regularly pay the premiumsfor one-time but get the tax credits quarterly.