The ARRA COBRA Subsidy: Operative Dates

September 1, 2008

To be eligible for the subsidy, an employee must be involuntarily terminated between September 1, 2008 and December 31, 2009. An employee involuntarily terminated before September 1, 2008, is not eligible for the subsidy, even if the employee’s COBRA coverage did not start until after September 1.

Example

An employee was laid off on June 15, 2008, but received severance pay, including health insurance benefits, through December 31, 2008. The employee is not eligible for the subsidy in March 2009. It is the date of involuntary termination that controls–in this case June 15, 2008.

February 17, 2009

This is the date the ARRA became law. Persons eligible for COBRA after September 1, 2008 and prior to February 17, 2008, who do not have it (even if they had it and dropped it), may elect COBRA during an extended enrollment period.

March 1, 2009

The first day of subsidy for most persons who had COBRA continuation coverage in effect on February 17, 2009.

December 31, 2009

This is the last day that an employee can be involuntarily terminated and still be eligible for the COBRA subsidy, unless the subsidy is extended by Congress.

September 30, 2010

The COBRA subsidy runs for nine months only, unless Congress extends the period of subsidy. Consequently, an employee who was involuntarily terminated on December 31, 2009 would be eligible for the COBRA subsidy through September 30, 2010.

Example

On December 15, 2009, an employee is involuntarily terminated and elects COBRA coverage that day. She will receive the subsidy for 9 months, until the earlier of August 15, 2010, or until she becomes eligible for other group health plan coverage or Medicare.

U.S. Becoming More Like Europe: Proposed Legislation Would Mandate Sick Leave

On May 18, the Healthy Families Act was introduced in the House of Representatives. The bill would require employers with 15 or more employees to provide workers with paid sick leave.

The proposed statute, which had been introduced in the previous Congress in 2007, would require employers to provide workers with up to seven days of paid sick leave annually on an accrued basis. Similar legislation has been introduced in the Senate by Sen. Edward Kennedy.

Under the proposed statute workers would earn one hour of paid sick leave for every 30 hours worked to a maximum of seven days (56 hours) per year. Employers would be permitted to allow employees to accrue more than 56 hours but would not be required to do so.

The statute would require that workers begin accruing leave on their first day of employment. A worker could begin using accrued leave after completing 60 days of employment. Accrued but unused leave would carry over from one year to the next to a maximum of 56 hours, unless the employer allowed greater accumulation.

Employees would be allowed to use leave for their own illness or to care for sick parents or children. In addition, leave could be used to visit a physician or other health care provider for preventive care. Further, leave could be used for absence which resulted from “domestic violence, sexual assault, or stalking,” in order to obtain medical care, to obtain services from a victim services organization, or to participate in related legal proceedings.

The proposed legislation would allow employers to require that employees provide certification by their doctor if they are absent for more than three consecutive days.

According to Representative DeLauro of Connecticut, the bill’s sponsor, almost half of all U.S. private sector workers have no paid sick leave. Among the lowest quartile of wage earners, 79% have no leave.

A recent report by the Center for Economic and Policy Research comparing laws and policies related to sick leave in 22 different countries, notes that the United States and Japan are the only countries of the 22 examined that do not provide any short-term paid sick leave to workers. All of the countries, except for the United States, provide long-term paid sick leave to workers with serious illnesses.

In this era of Swine Flu concerns, there is some data suggesting that paid sick leave helps to reduce the spread of contagious illness.

One major employer concern is the abuse of sick leave. Large employers lose about $850,000 annually from unscheduled sick and other personal days. However, San Francisco, which enacted mandatory sick leave in 2007, reports no negative impact on business compared to businesses in surrounding communities.