Comments on: The sticky, tricky details of COBRA subsidies http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/ Your daily dose of HR Thu, 18 Mar 2010 13:43:13 -0400 http://wordpress.org/?v=abc hourly 1 By: KAG http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-9204 KAG Mon, 13 Apr 2009 12:27:28 +0000 http://www.hrmorning.com/?p=1396#comment-9204 DC - TG gave you good advice. A little more in depth: The attorney we work with explained that it is a very high threshold to determine "gross misconduct." Mere voliations of a policy such as attendance, etc. would not be considered gross misconduct. He said theft or something severe like that would, but that it probabaly still wouldn't be worth the trouble to have to defend it if challenged. We were encouarged to send the notices to all involuntary terminations so as not to possibly be cited later for failing to do so. I have an employee who seems likely to sue for wrongful termination. If they were to win (Lord forbid) we would have been wrong not to offer the subsidy by the deadline. DC – TG gave you good advice. A little more in depth:

The attorney we work with explained that it is a very high threshold to determine “gross misconduct.” Mere voliations of a policy such as attendance, etc. would not be considered gross misconduct. He said theft or something severe like that would, but that it probabaly still wouldn’t be worth the trouble to have to defend it if challenged.

We were encouarged to send the notices to all involuntary terminations so as not to possibly be cited later for failing to do so. I have an employee who seems likely to sue for wrongful termination. If they were to win (Lord forbid) we would have been wrong not to offer the subsidy by the deadline.

]]> By: TG http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-9077 TG Fri, 10 Apr 2009 21:40:22 +0000 http://www.hrmorning.com/?p=1396#comment-9077 Based on information provided by DOL, the two employees DLK referenced above would be eligible for the COBRA subsidy. In most cases, DOL is hesitant to apply the "gross misconduct" exclusion unless you press charges and the employee is convicted. In most cases, it is not worthwhile. Note that in addition to working employees who do not get health insurance premium relief, neither would the family of a deceased or disabled employee because that employee was not "involuntarily terminated." Based on information provided by DOL, the two employees DLK referenced above would be eligible for the COBRA subsidy. In most cases, DOL is hesitant to apply the “gross misconduct” exclusion unless you press charges and the employee is convicted. In most cases, it is not worthwhile.

Note that in addition to working employees who do not get health insurance premium relief, neither would the family of a deceased or disabled employee because that employee was not “involuntarily terminated.”

]]> By: DC http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8973 DC Thu, 09 Apr 2009 16:01:37 +0000 http://www.hrmorning.com/?p=1396#comment-8973 In response to DLK's concern about involuntarily terminated employees for cause, my understanding of the subsidy is that you do not have to offer it to employees terminated for 'gross misconduct'. I have been unable to get any agency to define gross misconduct. They all said that is the employers call. We do not terminate employees unless they have violated company policy, hence in our eyes, gross misconduct. On the other hand sometimes managers do not document correctly and the employee may be given unemployment benefits. Can anyone share with me what they consider gross misconduct and if you would offer the subsidy to the employees who got unemployment even though they violated company policy? In response to DLK’s concern about involuntarily terminated employees for cause, my understanding of the subsidy is that you do not have to offer it to employees terminated for ‘gross misconduct’. I have been unable to get any agency to define gross misconduct. They all said that is the employers call. We do not terminate employees unless they have violated company policy, hence in our eyes, gross misconduct. On the other hand sometimes managers do not document correctly and the employee may be given unemployment benefits. Can anyone share with me what they consider gross misconduct and if you would offer the subsidy to the employees who got unemployment even though they violated company policy?

]]> By: Dallas HR http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8672 Dallas HR Tue, 07 Apr 2009 15:51:37 +0000 http://www.hrmorning.com/?p=1396#comment-8672 (I thank you too, JM) Kathy, we were with a PEO for a couple of years. Once we terminated our contract with them, we were again considered a viable employer. Right now, you are indeed "leased" employees, and ADP/Totalsource is the "employer of record." That means they take care of all of the employer responsibilities. I know that California is often an exception when it comes to regs, so check with your state to be sure; but my own experience with a PEO taught me that compliance with FMLA is the responsibility of the employer, which in your case is ADP/Totalsource. One thing to beware of though: in Texas, when we were leased employees, we ceased to exist in the world of unemployment taxes - our account was dormant. When we were no longer under the PEO, we ended up owing back taxes to cover unemployment benefits that were paid on our behalf to former employees (those who were employed by us PRIOR TO the time we became leased employees). Just something to think about. (I thank you too, JM)
Kathy, we were with a PEO for a couple of years. Once we terminated our contract with them, we were again considered a viable employer. Right now, you are indeed “leased” employees, and ADP/Totalsource is the “employer of record.” That means they take care of all of the employer responsibilities. I know that California is often an exception when it comes to regs, so check with your state to be sure; but my own experience with a PEO taught me that compliance with FMLA is the responsibility of the employer, which in your case is ADP/Totalsource.

One thing to beware of though: in Texas, when we were leased employees, we ceased to exist in the world of unemployment taxes – our account was dormant. When we were no longer under the PEO, we ended up owing back taxes to cover unemployment benefits that were paid on our behalf to former employees (those who were employed by us PRIOR TO the time we became leased employees). Just something to think about.

]]> By: KAG http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8658 KAG Tue, 07 Apr 2009 13:16:42 +0000 http://www.hrmorning.com/?p=1396#comment-8658 Thank you JM - I used to find these forums helpful, but I've gotten really tired of reading through all the political rhetoric to find the helpful comments and real information that I find useful. MF - please do us all a favor and just stop. Clearly you have too much time on your hands and you are making the HR profession look bad. Thank you JM – I used to find these forums helpful, but I’ve gotten really tired of reading through all the political rhetoric to find the helpful comments and real information that I find useful.

MF – please do us all a favor and just stop. Clearly you have too much time on your hands and you are making the HR profession look bad.

]]> By: Kathy http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8623 Kathy Mon, 06 Apr 2009 23:41:54 +0000 http://www.hrmorning.com/?p=1396#comment-8623 Our company of 15 or so employees has relationship with ADP/Totalsource. We are essentially now leased employees, so payroll & W2s say ADPTotalsource. Our handbook, etc, all reflect policies of original company. Payroll & HR are outsourced to ADP/TS. Although there are many Totalsource employees in So Cal, I heard that laws pertain to us as if we were still just 15-employee operation for FMLA purposes. Does the new Cobra subsidy law pertain to us? Thanks! Our company of 15 or so employees has relationship with ADP/Totalsource. We are essentially now leased employees, so payroll & W2s say ADPTotalsource. Our handbook, etc, all reflect policies of original company. Payroll & HR are outsourced to ADP/TS.

Although there are many Totalsource employees in So Cal, I heard that laws pertain to us as if we were still just 15-employee operation for FMLA purposes.

Does the new Cobra subsidy law pertain to us? Thanks!

]]> By: JM http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8622 JM Mon, 06 Apr 2009 23:36:43 +0000 http://www.hrmorning.com/?p=1396#comment-8622 sorry for the typos above. sorry for the typos above.

]]> By: JM http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8621 JM Mon, 06 Apr 2009 23:36:18 +0000 http://www.hrmorning.com/?p=1396#comment-8621 It's to bad that these forums end up being used for political agendas, rather than addressing the problems, regardless of which "side" you're on. The COBRA subsidies arenow in placel; let's try and help each other figure out how to deal with it going forward instead of placing blame on anyone! It’s to bad that these forums end up being used for political agendas, rather than addressing the problems, regardless of which “side” you’re on. The COBRA subsidies arenow in placel; let’s try and help each other figure out how to deal with it going forward instead of placing blame on anyone!

]]> By: DLK http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8615 DLK Mon, 06 Apr 2009 22:31:47 +0000 http://www.hrmorning.com/?p=1396#comment-8615 Regarding the COBRA, I have two individuals who were involuntarily terminated, one who was sleeping in a clients vehicle and the other was a habitual no call-no show, they get the Government to provide 65% of their COBRA. What about us, the hardworkers, who is helping us pay 65% of our health ins premium?? Effective June 1, 2009, my health insurance premium is increased to $9900.00 a year or $825.00 a month, a 18.36% increase. I only go to the doctor once or twice a year and this is absolutely ridiculous...... Regarding the COBRA, I have two individuals who were involuntarily terminated, one who was sleeping in a clients vehicle and the other was a habitual no call-no show, they get the Government to provide 65% of their COBRA. What about us, the hardworkers, who is helping us pay 65% of our health ins premium?? Effective June 1, 2009, my health insurance premium is increased to $9900.00 a year or $825.00 a month, a 18.36% increase. I only go to the doctor once or twice a year and this is absolutely ridiculous……

]]> By: CLH http://www.hrmorning.com/the-sticky-tricky-details-of-cobra-subsidies/comment-page-1/#comment-8601 CLH Mon, 06 Apr 2009 20:53:23 +0000 http://www.hrmorning.com/?p=1396#comment-8601 Thank you, JC. Well said. Thank you, JC. Well said.

]]>