Will COBRA Bite your business?

Tuesday, Apr 21,2009, 3:49:30 PM Click:

Copyright 2009 Newstex LLCAll Rights ReservedNewstex Web BlogsCopyright 2009 Biz Plan Hacks Biz Plan Hacks

April 18, 2009 Saturday 1:06 PM EST

252 words

Will COBRA Bite Your Business?

Apr. 18, 2009 (Creative Weblogging delivered by Newstex) -- BusinessWeek pointed out last week that new Federal subsidies for COBRA are worrying some employers.

COBRA (the Consolidated Omnibus Budget Reconciliation Act) is a Reagan Era law that, "among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment," according to Wikipedia. When an employee uses COBRA, the employer continues to bear at least some of the costs involved. And the new subsidies means that employers could now end up carrying those costs for longer than they might without the subsidies. The subsidies come with new "administrative hassles" for businesses and a requirement that they figure out which former employees qualify and notify them. BusinessWeek says that only 20% of eligible workers opt for COBRA coverage when they're laid off, but they tend to have the worst health problems.Insurers or businesses that pay for their own workers' claims generally pay more than $1.50 in claims for every $1 they collect in premiums from people covered under COBRA plans. That's because former workers willing to pay the hefty premiums often do so because they're sick and need the coverage. Adding more COBRA cases could bump up claim totals. But it also could encourage healthier people to enroll and balance out the risk.In other words, the exact impact on business is difficult to predict. So what else is new... © a.drian Newstex ID: CREA-0025-34239069

The views expressed on blogs distributed by Newstex and its re-distributors ("Blogs on Demand®") are solely the author's and not necessarily the views of Newstex or its re-distributors. Posts from such authors are provided "AS IS", with no warranties, and confer no rights. The material and information provided in Blogs on Demand® are for general information only and should not, in any respect, be relied on as professional advice. No content on such Blogs on Demand® is "read and approved" before it is posted. Accordingly, neither Newstex nor its re-distributors make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained therein or linked to from such blogs, nor take responsibility for any aspect of such blog content. All content on Blogs on Demand® shall be construed as author-based content and commentary. Accordingly, no warranties or other guarantees will be offered as to the quality of the opinions, commentary or anything else offered on such Blogs on Demand®. Reader's comments reflect their individual opinion and their publication within Blogs on Demand® shall not infer or connote an endorsement by Newstex or its re-distributors of such reader's comments or views. Newstex and its re-distributors expressly reserve the right to delete posts and comments at its and their sole discretion.

April 19, 2009