Corporate events such as mergers and acquisitions often signal growth, but they also often lead to unavoidable layoffs, as positions become double or new management changes. To facilitate the transition of laid-off workers, employers often provide severance pay and sometimes pay part of the health care for a specified period of time. However, the language of the redundancy agreement and seemingly small details related to the company can give very different cobra results. While Downsizing can bring you down, don`t stumble on these three COBRA errors. In the future, employers who have traditionally offered temporary cobra benefits as part of a compensation package should consider an alternative to reduce the risk of confusion and conflict due to the time problems of the ACA and COBRA. One of the ideas is that the employer proposes an after-tax cash payment corresponding to the amount of monthly cobra premiums that the employer would have paid for the employee`s benefit. Second, the employee can use the funds as he sees fit, for example by: in both cases, COBRA`s unequivocal solution could extend the coverage period beyond what the employer had in mind (and beyond what each insurer will cover). Therefore, severance pay must be clearly rewarded with any confusion. As I said before, cobra rules are complex! Each termination is different and severance agreements vary; We advise you to be advised in the handling of COBRA cases in termination situations. Scenario #1: the agreement provides that the termination of the employment relationship results in a loss of coverage for COBRA purposes and that the employee must choose COBRA to pursue health insurance.
The agreement provides that the employer pays a subsidy to monthly cobra premiums for the first 12 months of COBRA. The employer sends a COBRA message in a timely manner after the termination of the employment relationship and the employee chooses COBRA. If the employee pays his share of the bonus in a timely manner, he is entitled to COBRA for 18 months after the termination of the employment, 12 of which are subsidized by the employer. The Tribunal stated that employers were not required to ensure that COBRA notifications were actually received and found that the employer and benefit manager had provided uncontested evidence that they had sent two COBRA voting notifications to an address that the employee had confirmed was correct and that the employee had not chosen COBRA coverage. However, there remained a dispute as to whether the premium deductions constituted a waiver of cobra`s voting obligation to vote on the severance contract, so the court granted that right.