The American Recovery and Reinvestment Act of 2009 is a broad piece of legislation which impacts individuals, businesses and government agencies.
The enactment of HR 4851 results in the following:
Individuals who experience(d) a loss of coverage due to an involuntary termination occurring on or after September 1, 2008 and on or before May 31, 2010 are eligible for the subsidy.
Individuals who lost coverage due to a reduction of hours on or after September 1, 2008 and who are subsequently involuntarily terminated from employment on or after March 2, 2010 and on or before May 31, 2010 are eligible for the subsidy. These individuals must be notified of their subsidy eligibility within 60 days of the involuntary termination regardless of whether or not they elected COBRA based on the reduction of hours qualifying event. COBRA coverage elected based on the involuntary termination event is effective as of the first coverage period following the involuntary termination. HOWEVER, the 18-month COBRA coverage period is measured from the reduction of hours event. Consequently a gap in coverage may exist between the dates of the reduction of hours and involuntary termination qualifying events. The 15-month subsidy period is measured from the involuntary termination event.
An individual who experiences a qualifying event that is termination of employment on or after April 1, 2010 and prior to April 15, 2010 and who has previously been provided an Election Notice not containing the HR 4851 provisions (extension of subsidy through May 31, 2010) must be provided a new Election Notice and new 60-day election period. This notice must be provided within the required timeframe for providing a COBRA Election Notice. COBRA coverage elected and paid will be effective as of the termination of employment qualifying event date. However, only those individuals who lose coverage due to an involuntary termination are eligible for the COBRA premium subsidy. Individuals who are now eligible for the subsidy and had previously paid for a subsidy eligible period (e.g. April of 2010) in fully may be entitled to a refund or credit.
In response to this legislation, ADP is working to accommodate these changes. ADP will continue to monitor legislative guidance regarding the American Recovery and Reinvestment Act as it becomes available. Check back often for updates regarding other components of the legislation or subscribe to our RSS feed for updates.
COBRA Update – 12/24/09
On December 19, 2009, the Department of Defense Appropriations Act of 2010 (HR 3326) was signed into law by President Obama. As a result of the enactment of this legislation, the Consolidated Omnibus Budget and Reconciliation Act (COBRA) premium subsidy provided under the American Recovery and Reinvestment Act of 2009 (ARRA) has been extended. HR 3326 extends the duration of the subsidy from nine months to 15 months and extends the deadline for eligibility from December 31, 2009 to February 28, 2010.
In response to this legislation, ADP is working to accommodate these changes. As we take action to make our client’s HR experience better, we will continue to notify clients accordingly.
For more information on the COBRA ARRA premium subsidy provisions, please see ADP Tech Flex.
In response to a large number of questions received regarding eligibility for the COBRA premium reduction under current law, The Employee Benefits Security Administration updated the COBRA page, www.dol.gov/COBRA , to add new FAQs at http://www.dol.gov/ebsa/faqs/faq-cobra-arra.html . Visitors are encouraged to subscribe to the COBRA page for updates.
The stimulus plan includes changes to the way COBRA assistance is provided to employees. Click here to learn more on COBRA changes.
Existing ADP COBRA clients click here for additional information.
Tax Credit Incentive Update – 3/5/09
The stimulus plan includes a variety of changes and additions to tax credit/incentive programs, such as the Work Opportunity Tax Credit program. Click here to learn more.
Making Work Pay Tax Credit Update – 3/4/09
The Making Work Pay provision of the stimulus plan gives workers a rebate/credit for the 2009 and 2010 tax years. Click here to learn more about the Making Work Pay tax credit.
Expanded Earned Income Tax Credit (EITC) Update – 3/3/09
There is a temporary increase in the Earned Income Tax Credit. Click here to learn more about the expanded Income Tax Credit.
Commuter Benefit Update – 2/25/09
The IRS has increased the limit for pre-tax contributions and benefit limits under the Commuter Benefits Transit Accounts. The new limit will take effect March 1, 2009. Click here to learn more on Commuter Benefits Transit Account changes.
The enactment of HR 4851 results in the following:
- Individuals who experience(d) a loss of coverage due to an involuntary termination occurring on or after September 1, 2008 and on or before May 31, 2010 are eligible for the subsidy.
- Individuals who lost coverage due to a reduction of hours on or after September 1, 2008 and who are subsequently involuntarily terminated from employment on or after March 2, 2010 and on or before May 31, 2010 are eligible for the subsidy. These individuals must be notified of their subsidy eligibility within 60 days of the involuntary termination regardless of whether or not they elected COBRA based on the reduction of hours qualifying event. COBRA coverage elected based on the involuntary termination event is effective as of the first coverage period following the involuntary termination. HOWEVER, the 18-month COBRA coverage period is measured from the reduction of hours event. Consequently a gap in coverage may exist between the dates of the reduction of hours and involuntary termination qualifying events. The 15-month subsidy period is measured from the involuntary termination event.
- An individual who experiences a qualifying event that is termination of employment on or after April 1, 2010 and prior to April 15, 2010 and who has previously been provided an Election Notice not containing the HR 4851 provisions (extension of subsidy through May 31, 2010) must be provided a new Election Notice and new 60-day election period. This notice must be provided within the required timeframe for providing a COBRA Election Notice. COBRA coverage elected and paid will be effective as of the termination of employment qualifying event date. However, only those individuals who lose coverage due to an involuntary termination are eligible for the COBRA premium subsidy. Individuals who are now eligible for the subsidy and had previously paid for a subsidy eligible period (e.g. April of 2010) in fully may be entitled to a refund or credit.
In response to this legislation, ADP is working to accommodate these changes. ADP will continue to monitor legislative guidance regarding the American Recovery and Reinvestment Act as it becomes available. Check back often for updates regarding other components of the legislation or subscribe to our RSS feed for updates.
COBRA Update – 12/24/09
- On December 19, 2009, the Department of Defense Appropriations Act of 2010 (HR 3326) was signed into law by President Obama. As a result of the enactment of this legislation, the Consolidated Omnibus Budget and Reconciliation Act (COBRA) premium subsidy provided under the American Recovery and Reinvestment Act of 2009 (ARRA) has been extended. HR 3326 extends the duration of the subsidy from nine months to 15 months and extends the deadline for eligibility from December 31, 2009 to February 28, 2010.
In response to this legislation, ADP is working to accommodate these changes. As we take action to make our client’s HR experience better, we will continue to notify clients accordingly.
For more information on the COBRA ARRA premium subsidy provisions, please see ADP Tech Flex. - In response to a large number of questions received regarding eligibility for the COBRA premium reduction under current law, The Employee Benefits Security Administration updated the COBRA page, www.dol.gov/COBRA , to add new FAQs at http://www.dol.gov/ebsa/faqs/faq-cobra-arra.html . Visitors are encouraged to subscribe to the COBRA page for updates.
- The stimulus plan includes changes to the way COBRA assistance is provided to employees. Click here to learn more on COBRA changes.
Tax Credit Incentive Update – 3/5/09
- The stimulus plan includes a variety of changes and additions to tax credit/incentive programs, such as the Work Opportunity Tax Credit program. Click here to learn more.
Making Work Pay Tax Credit Update – 3/4/09
- The Making Work Pay provision of the stimulus plan gives workers a rebate/credit for the 2009 and 2010 tax years. Click here to learn more about the Making Work Pay tax credit.
Expanded Earned Income Tax Credit (EITC) Update – 3/3/09
- There is a temporary increase in the Earned Income Tax Credit. Click here to learn more about the expanded Income Tax Credit.
Commuter Benefit Update – 2/25/09
-
The IRS has increased the limit for pre-tax contributions and benefit limits under the Commuter Benefits Transit Accounts. The new limit will take effect March 1, 2009. Click here to learn more on Commuter Benefits Transit Account changes.
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