Stimulus and Its Impact on Individual Health Market

[somarco]

The COBRA subsidy is like every other provision in the Porkulus bill, no one bothered to think it through and try to understand the dynamics of the provision and no one who voted on the bill took the time to read it.

Nancy was in a hurry to get the vote in before leaving for a week in Italy.

Prezbo needed to escape back to Chi-town for some photo ops with Michelle.

One of the problems with bills like this is once spending is in place it is never taken away. But to address your question . . .

The COBRA subsidy (for now at least) lasts for 9 months. Even with the subsidy, some folks don't need, or can't afford, COBRA when there is no income.

And since you can parse COBRA sometimes it is better to put the healthy folks on something like an HDHP/HSA and leave the sickies on the COBRA benefit.

Like anything else, it is a matter of educating your clients.

And what about employees of places like Circuit City, Goody's or Linen's and Things?

There is no COBRA there.

I have quite a few clients here in Atlanta that are former Coca-Cola employees. Some still work there but only as 1099 while others were simply laid off and are now doing their own thing.

And I have picked up clients who are still working but the employer has eliminated group health insurance benefits.

In some ways the recession has boosted my business. This is especially true for referrals which have pretty much sustained me for the last 3 months.

 

[bill3173]

The COBRA subsidy is like every other provision in the Porkulus bill, no one bothered to think it through and try to understand the dynamics of the provision and no one who voted on the bill took the time to read it.

Nancy was in a hurry to get the vote in before leaving for a week in Italy.

Prezbo needed to escape back to Chi-town for some photo ops with Michelle.

One of the problems with bills like this is once spending is in place it is never taken away. But to address your question . . .

The COBRA subsidy (for now at least) lasts for 9 months. Even with the subsidy, some folks don't need, or can't afford, COBRA when there is no income.

And since you can parse COBRA sometimes it is better to put the healthy folks on something like an HDHP/HSA and leave the sickies on the COBRA benefit.

Like anything else, it is a matter of educating your clients.

And what about employees of places like Circuit City, Goody's or Linen's and Things?

There is no COBRA there.

I have quite a few clients here in Atlanta that are former Coca-Cola employees. Some still work there but only as 1099 while others were simply laid off and are now doing their own thing.

And I have picked up clients who are still working but the employer has eliminated group health insurance benefits.

In some ways the recession has boosted my business. This is especially true for referrals which have pretty much sustained me for the last 3 months.

You are correct in your assumptions, regarding this "Cobra Subsidy". This item by itself can be good for the agents and the clients. Many of the people who will opt for this would never have taken a policy anyway, or would have dropped it.

This can actually be viewed in a favorable light, unless 25+% of your business is STM, as a cheap cobra alternative. Even so, good agents will work it out.

This job just gets better every day.

 

[taterpeeler]

correct me if im wrong, waiting for the email from washington splaining this mess, i should get it today according to bartons chief of staff. the subsidy will result from a tax credit allocated to the EMPLOYER, and they will pay the 65%, not the EMPLOYEE getting the credit. so the employee only sees the price of cobra as 65% less. its the employer who pays it and deducts the 65% form payroll taxes with a tax credit.

if this is true then what about the small biz with say 50 employees, he lays off half his staff due to biz slowdown. what happens when his "65% tax credit" is greater than his payroll taxes because of the number of perple he layed off? is this even posiable?

the max income is 250k for families to get the 65%, is that before layoff or after layoff income?

why would a small biz owner facing layoffs even stay in biz now if they are on the hook for this 65%? why would a small biz keep coverage on his workers? I would just cancel all coverage now so i would not be on the hook if i had layoffs.

dunno, and yes, i rambled a little.

also, i do not sell group biz so i dont even know if any of the above comments are 100% true

 

[somarco]

subsidy will result from a tax credit allocated to the EMPLOYER, and they will pay the 65%, not the EMPLOYEE getting the credit.

Appears you are correct.

Obama signs stimulus bill providing COBRA subsidy | Business Insurance News, Analysis & Articles

Compensation Force: Approved Stimulus Bill Includes Employer Subsidy for COBRA Premiums

Employer Paid COBRA Subsidies in the Economic Stimulus Bill: Initial Action Plan : Employee Benefits Legal Blog

i do not sell group biz so i dont even know if any of the above comments are 100% true

Even so, you raise some valid points.

 

[Guest]

Wasting is not change, LOL

I agree not much should change. Except wasting billions of tax payers dollars.

 

[motoxxx]

Rob you crack me up.

Change is all we will have left in our pockets when we are taxed to death to give everything to everyone else.