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Here are a few of the most important facts pertaining to your duties under this new federal act.
- Any former employee involuntarily terminated between September 1, 2008 and February 28, 2010 must be notified in writing of their rights by you, the plan sponsor, or a TPA. The fine for failure to comply is $110 per day for every day that every notice is past due.
- These former employees must be offered a subsidy in the amount of 65% of their premium.
- The Subsidy may apply for up to 15 months.
- Qualified beneficiaries (employees involuntarily terminated) between September 1, 2008 and now must receive a second notification with chance to elect the coverage by April 18, 2009. They must be given 60 days to accept.
- Employers are required to pay the subsidy for their ex-employees up front and then seek reimbursement from the US Treasury Dept. on your payroll taxes. The IRS has already revised the Form 941 to allow the credit.
- The Department of Labor has been instructed to provide sample notice language no later than March 17,2009.
These are only the highlights. Integrity Insurance is not a CPA, Attorney, or Third Party Administrator! This message is a public service announcement intended solely to make you, our clients and friends aware of this important new law. We highly recommend you consult with your attorneys, CPA’s, and-or TPA’s before taking action with regards to this act.
We will be forwarding sample notification letters to all of our Benefits Clients as they become available to us.
You should find the following links to be helpful.
US Treasury
http://www.irs.gov/newsroom/article/0,,id=204708,00.html
US Department of Labor
http://www.dol.gov/ebsa/cobra.html
Best Regards,
Nunzio Previtera, CIC CRM
Vice President
Integrity Insurance Agency, Inc.
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