Employers may want to send a notice advising the employee that the subsidy is ending upon the employee's Medicare eligibility, before starting to charge a COBRA premium, even if the individual has not provided notice of Medicare eligibility. A company recently fired an employee for dishonesty. It depends. However, employers may interpret the term "gross misconduct" differently. Generally, ordinary dishonesty probably doesn't meet the definition of gross misconduct, though it could depending upon what the employee lied about.
For misconduct to be considered "gross," it would likely need to be beyond negligence. Typically, incompetence, an honest mistake, or substandard job performance are not enough. Instead, there has to be something about the employee's misconduct that was outrageous—something deliberate or reckless. Some courts consider whether the behavior was illegal. The bottom line is that the employer must decide that the termination of the individual's employment is for severe, intentional misconduct in order to deny COBRA and the subsidy.
Stephanie A. Smithey is co-chair of the employee benefits and executive compensation practice group at law firm Ogeltree Deakins and is based in the firm's Indianapolis office. Timothy J. Stanton and Hillary M. Sizer are attorneys in the firm's Chicago office.
All rights reserved. Republished with permission. This article was slightly edited from the original , as posted on the firm's website. You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page. Smithey, Timothy J. By Stephanie A. Image Caption. Benefits Compliance Health Care Continuation. You have successfully saved this page as a bookmark. OK My Bookmarks. Please confirm that you want to proceed with deleting bookmark.
The notice confirms that individual-state continuation coverage provides comparable coverage to COBRA continuation coverage and thus permits AEIs to access the subsidy even if the state program only covers a subset of state residents. The notice additionally provides that if a plan is subject to both state-mandated continuation coverage and federal COBRA, the employer is the "premium payee" eligible to claim the tax credit and not the insurer—even if the state-mandated continuation coverage requires the AEI to pay premiums directly to the insurer after the period of federal COBRA ends.
The notice also provides further technical guidance on claiming the tax credit in connection with the subsidy. To claim the premium assistance credit, employers should report the credit and number of individuals receiving assistance on their federal employment tax returns, usually Form , which is generally due by the last day of the month following the end of the current quarter.
Some employers "now may need to make amendments … to their Form filings," Groom Law Group noted. You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page. Reuse Permissions. Image Caption.
Notices and Deadlines Under U. Within 14 days of that notification, the plan administrator is required to notify the individual of the individual's COBRA rights.
New Guidance IRS Notice , released on July 25, supplements prior guidance under Notice and addresses issues about eligibility for and implementation of the subsidy. Dental and vision coverage The notice clarifies that if an AEI previously elected COBRA continuation coverage for dental-only or vision-only coverage, their subsidy eligibility ends when the AEI becomes eligible for any other disqualifying group health plan or Medicare, even if the new coverage does not include dental or vision coverage.
State continuation coverage The notice confirms that individual-state continuation coverage provides comparable coverage to COBRA continuation coverage and thus permits AEIs to access the subsidy even if the state program only covers a subset of state residents. Claiming the tax credit The notice also provides further technical guidance on claiming the tax credit in connection with the subsidy.
Health Care Continuation Reporting and Disclosure. You have successfully saved this page as a bookmark. OK My Bookmarks. Please confirm that you want to proceed with deleting bookmark. The Department of Labor and Department of Health and Human Services is expected to provide new model notices within days of enactment of the law.
Participants may still be responsible for premiums if they elect coverage for an FSA or other benefits being offered post-employment. If an employer permits individuals to change coverage, the premium subsidy cannot exceed the cost of the coverage option the individual was in at the time of the qualifying event.
I am paying cobra insurance since November Should I call the ex Employer to start paying April to September premium? Hi Ivette. We are waiting for details to develop and will provide guidance in the near future around actions to take. Thanks for your comment. We need the information now in March to make decisions about switching to cobra from current health coverage.
Receiving information in April may mean a missed month of cobra subsidy or a month without any insurance as previous insurance purchased instead of cobra would need to be canceled. Hi Robert. I will not be at my place of residence for the month of April.
Does the DOL or previous employer notify me and how? Thank you. Hi Morgan. If you have mail forwarding services, you should receive the mail at your alternate residence in April. Your previous employer will notify you.
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