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September 19, 2018
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COBRA COVERAGE
Updated On: Apr 29, 2009

   Many employees who lose their jobs also lose health insurance because they cannot afford to pay the applicable COBRA premium.Under the recently enacted American Recovery and Reinvestment Act of 2009, certain individuals who are eligible for COBRA continuation health coverage may now be eligible to pay a reduced premium amount, equivalent to 35% of the premium for COBRA, for up to 9 months. This reduced premium is made possible by a government paid subsidy, "fronted" by the employer, for the remaining 65% of the COBRA premium cost. Please refer to the following questions and answers for important information about how the COBRA premium reduction may affect you:

Q: Who is eligible for the subsidy?

 The subsidy is available to employees who are, involuntarily terminated on or after September 1, 2008 but before January 1, 2010 (the last date to qualify is December 31, 2009) and who are eligible for, and elect, COBRA continuation coverage (or similar State coverage). The spouses and dependants of these employees, who are otherwise entitled to COBRA coverage are also eligible. Please note that employees terminated for "gross misconduct" are not eligible, since they are not entitled to elect COBRA continuation under already existing COBRA rules.

   There exists a phase-out of eligibility for the subsidy based upon income. Accordingly, those individuals whose modified gross income is less than $125,000, or $250,000 for those filing joint returns, are entitled to recieve the entire subsidy tax free. However, individuals, or joint filers, with modified gross income above those amounts will be required to repay a portion of the subsidy, and the subsidy is phased out completely for individuals whose adjusted gross income exceeds $145,000, or $290,000 for those filing joint returns. For those individuals, the subsidy would have to be repaid completely as an additional tax. The Act provides that persons who earn in excess of these amounts may choose to permanently waive the subsidy by notifying the employer of the waiver.

   For individuals who were involuntarily terminated between September 1, 2008 and February 16, 2009 (the day before the Act became effective) but did not enroll in COBRA continuation coverage, those individuals will have a second opportunity to enroll. Under the Act, a plan is required to notify such individuals of the second election period by April 18, 2009, after which time they have 60 days to enroll in COBRA coverage with the premium reduction. Individuals that elected COBRA coverage during this period and paid the full premium during this period will be eligible for reimbursement of the premium subsidy or a credit against future premium payments.

Q: How long does the subsidy last?

    The subsidy can last up to 9 months. However, the subsidy will end earlier if:

    1) an individual becomes eligible for Medicare or another group health plan (such as a plan sponsored by a new employer or a spouse's employer); or

    2) an individual reaches the end of their maximum COBRA coverage period.

   An individual must notify a plan if they become eligible for coverage for another group plan or Medicare. Failure to do so will result in a tax penalty.

Q: How is the subsidy paid?

   An employer is required to pay 65% of the COBRA premium upon receipt of payment for 35% of the premium from the employee. The employer submits this payment on the employee's behalf and can then seek reimbursement from the government through a payroll tax offset.

Q: What action is my employer and/or plan administrator required to take?

   For involuntary terminations that occur after February 17, 2009, plan administrators (and employers, if they are the plan administrator) are required to give notice of premium subsidy to terminated employees and their spouses within 44 days of the termination. However, because the Department of Labor did not issue a Model notice until March of this year, plan administrators had the option of waiting to issue the notice. In that event, however, the 60 day period in which to elect the COBRA coverage with the premium subsidy does not commence until the notice is issued.

   For persons terminated involuntarily after September 1, 2008, and before the Act's enactment date, plan administrators must provide notice of the premium subsidy on or before April 18, 2009. These indivuduals will have 60 days after the notice is issued to elect coverage with the premium subsidy.

Q: What can I do if my employer refuses to pay the subsidy?

    Persons who are eligible for the subsidy, but are not provided the subsidy by their employer, may appeal the denial directly to the Department of Labor. A decision will be issued within 15 days after reciept of the application for review. However, procedures for initiating such an appeal have not yet been issued by the Department of Labor. An official application form will be designated for such appeals. This form will soon be available at:   www.dol.gov/COBRA, along with instructions for submitting the form.

   If you believe you have been inappropriately denied eligibility for the premium reduction, you may wish to speak with an Employee Benefits Security Administration Benefits Advisor at: 1-866-444-3272 before filing this form.

 


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  • This Web page provides the latest updates for the national contract, riders and supplements that cover about 3,500 Teamsters at DHL Express.

  • We Are eXPOsing XPO’s Global Greed

    XPO Logistics is a top ten global logistics and transportation company with annual revenue of $15 billion and 89,000 employees, another 10,000 workers classified as independent contractors, and thousands more working for firms that subcontract with XPO. We are the REAL workers at XPO Logistics worldwide exposing the truth about the company’s global greed, illegal wage theft, unsafe conditions, and abhorrent and vicious anti-worker, anti-union tactics. 

    This greed includes mistreating former Con-way Freight workers in the United States who are being kept in the dark about terminal closures and layoffs, and the company’s illegal refusal to bargain contracts and denying their workers’ federally protected right to organize. It also includes port, rail and last-mile drivers around the country and in Southern California fighting wage theft in excess of $200 million because they are misclassified as independent contractors and denied the right to form their union. This greed has caused numerous lawsuits and strikes.  Greed also means an unsafe workplace and mistreating its warehouse employees.

    XPO’s greed extends to Europe beginning with breaking its promise to not layoff any workers for at least 18 months. French workers and the unions have been fighting back against XPO’s disrespect, lies and attempts to slash jobs. Similar struggles are taking place in Great Britain, Spain, Belgium, the Netherlands, and across Europe.

    Join the worldwide struggle now! Get involved with this campaign by joining the Facebook group “XPO Exposed.”

    Together, we can eXPOse the company’s global greed and win fairness, respect and dignity for tens of thousands of XPO employees around the world!

  • This page provides the latest contract information to the 7,500 Teamsters—drivers, dockworkers and office staff—employed by ABF Freight System, Inc.

  • Workers’ pensions are being endangered by both Congress and those charged with overseeing them. The Teamsters and our members are standing united to say “No!” to cuts and “Yes!” to greater retirement security!

  • The ‘Let’s Get America Working!’ campaign seeks to restore a dynamic and prosperous middle class to drive economic growth by helping to advance policy decisions that create and maintain good middle-income jobs, guarantee retirement security, expand access to the American Dream, and ensure that the benefits of the ongoing economic recovery are felt by the many, not just the few.

  • This webpage provides information on the Teamsters Union’s legislative advocacy at both the federal and state level as well as our field activity to support those policy positions and to get strong labor candidates elected to office.  Among other resources, you will find our federal legislative scorecard, formal statements of policy position and communications to Capitol Hill,  a weekly update on federal legislative happenings, an overview of bills we are tracking at the state level, and quick links to take action on priority issues.

  • This web page provides information on the ongoing effort to renegotiate the North American Free Trade Agreement (NAFTA). Since 1994, NAFTA has devastated working families, putting corporate profits ahead of people.  What’s worse is that NAFTA has become the blueprint for all other trade agreements, from the way that it was negotiated in secret, to the bad provisions that have made their way into every agreement that has been signed since then.  Now, NAFTA is being renegotiated and we demand that it be reframed to work for workers instead of corporate interests.

  • The Teamsters have stood in solidarity with worker struggles in other countries since our founding. With economic globalization, our ability to organize increasingly depends on our ability to build alliances with workers on a global scale.
    More than ever, Teamsters are organizing and bargaining with multi-national companies. A key objective of our Global Strategies Campaign is to build strong alliances with unions around the globe who organize and bargain with common employers. Our focus is on workers in the emerging global supply chains – the infrastructure of globalization.
    Globalization creates new opportunities for international worker solidarity. We seek common cause with workers around the world to build social justice for all workers and the communities in which they live.

  • The contributions of black members to the success of the Teamsters Union are numerous, varied and as old as the union itself. This month, the Teamsters Union spotlights some of those contributions.

 
 
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