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COBRA Subsidy - Need Help ASAP
Benefits & Compensation
COBRA Subsidy - Need Help ASAP
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
If an employee "voluntarily" takes a temporary layoff from the company, are they still eligible for the subsidy? I have a letter signed by the employee acknowledging that his temporary layoff is volun
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Forums » Topic Forums » Benefits & Compensation » COBRA Subsidy - Need Help ASAP
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COBRA Subsidy - Need Help ASAP
posted at 4/30/2009 6:21 AM EDT
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Posts: 92
First: 2/4/2002 Last: 3/28/2011 |
If an employee "voluntarily" takes a temporary layoff from the company, are they still eligible for the subsidy? I have a letter signed by the employee acknowledging that his temporary layoff is voluntary.
Thank you. |
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COBRA Subsidy - Need Help ASAP
posted at 4/30/2009 7:12 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I would agree that a voluntary temporary layoff would fall under ARRA. Because take the opposite scenario...if he hadn't volunteered, wouldn't he or someone else have been laidoff anyway?
On the DOL/IRS webcast they used the example of retiring due to buyout/severance offer -- and that was involuntary. Directly from the IRS's Q&A about eligibility for ARRA subsidy: "AE-19 Q. Is an employer-initiated layoff an involuntary termination of employment for purposes of eligibility for the COBRA premium subsidy? A. Yes, an employer-initiated layoff is generally an involuntary termination of employment for purposes of eligibility for COBRA premium subsidy. (03/19/09)" http://www.irs.gov/newsroom/article/0,,id=205364,00.html |
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COBRA Subsidy - Need Help ASAP
posted at 5/2/2009 6:32 AM EDT
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Posts: 464
First: 6/30/2004 Last: 11/22/2010 |
The word spin of putting "voluntary" in quotes and saying the employee is taking the layoff does not mean the employee asked for a leave of absence, or other separation that was for the employees benefit or purposes.
I think the previous posters are correct - though it wasn't directly said that it was employer driven, the implication is surely there for all to infer that is what happened. |
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COBRA Subsidy - Need Help ASAP
posted at 5/4/2009 10:47 AM EDT
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Posts: 12
First: 3/2/2009 Last: 1/27/2011 |
I just attended a seminar on this on Friday. Involuntary termination is defined as, "Severance from employment due to independent exercise of unilateral authority to terminate employment, other than due to employees request, where the employee was willing and able to continue performing services". Hope this helps. |
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COBRA Subsidy - Need Help ASAP
posted at 5/5/2009 6:33 AM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
Based on this, you could handle it one of 2 ways:
1. Crumple up the letter and lay the employee off. Really, it's semantics. 2. Pay 65% of the medical premiums while this employee is laid off. The savings are still going to be substantial to the employer since the contribution to the health insurance premiums is going to be a fraction of monthly payroll. |
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