Cobra Subsidy On Voluntary Plans

[moonlightandmargaritas]

Death is NOT an involuntary termination of employment.

Wow Dave, I'm shocked. If there's one thing I thought I knew about mortality, it's that it's rarely voluntary.

 

[Dave020]

If I understand this:

If an employee gets laid off, fired or terminated (without gross misconduct), the employee and dependents get the subsidy

If an employee quits and feels he/she would have been adversely harmed by one of a series of events, that employee and dependents could get the subsidy

If an employee drops dead because the boss gave him a heart attack thinking he could suffer a "reduction of hours/pay decrease/relocation/bad burrito from Taco Bell/etc" his or her dependents don't get the subsidy

Who wrote this stuff?

And these people want to run the health care?

 

[ABC]

Ok I am confused on the death of an employee.
Does that mean the spouse of the deceased employee does not qualify for the subsidy?

Dave
Where did that publication come from?


I am advising my clients that outside of gross misconduct is it really worth hiring an attorney to interrupt involuntary?
It would cost at least $5,000 to challenge an upset employee on this.

 

[Dave020]

Ok I am confused on the death of an employee.
Does that mean the spouse of the deceased employee does not qualify for the subsidy?

That is how I would interpret this. If the employee dies, no subsidy for COBRA for the surviving dependents.

Dave
Where did that publication come from?

This version is from Conexis, a COBRA administrator now owned by Word & Brown. I have seen the IRS pub for this (have to find the link) and it is identical.

I am advising my clients that outside of gross misconduct is it really worth hiring an attorney to interrupt involuntary?
It would cost at least $5,000 to challenge an upset employee on this.

Probably too expensive to challenge since the overall subsidy might not even be that much.

PS - here is the IRS guidance on this, which is the master source.

http://www.irs.gov/pub/irs-drop/n-09-27.pdf

Bottom page 5 and top page 6: "In addition, involuntary termination does not include the death of an employee or absence from work due to illness or disability"

 

[ABC]

Thank you