Employer pay COBRA
Ki
27 Posts
We are laying off about 40 employees during the last week of November, who will then lose insurance coverage for all of December and January. (We will rehire in January, so they will be covered again starting in February.) This is the first time we've had to lay staff off at this time of the year, and we are trying to figure out a way to help them out, but this is pretty difficult to do since there is very, very little room in the budget.
Can anyone tell me what restrictions or ramifications there would be to offering to pay for COBRA medical coverage for any staff that end up needing medical care over these two months?
I found an article that explained that this is allowed, and that the money is not taxable to the employee as long as the employer pays it directly to the insurer. But the last statement in the article warns that "tax considerations are arguably the least of the employer's concerns. Therefore, before agreeing to such an arrangement, an employer should consider these issues with the assistance of expert counsel." Well, I'm hoping you all could give me some advice.
THANKS!!!
Can anyone tell me what restrictions or ramifications there would be to offering to pay for COBRA medical coverage for any staff that end up needing medical care over these two months?
I found an article that explained that this is allowed, and that the money is not taxable to the employee as long as the employer pays it directly to the insurer. But the last statement in the article warns that "tax considerations are arguably the least of the employer's concerns. Therefore, before agreeing to such an arrangement, an employer should consider these issues with the assistance of expert counsel." Well, I'm hoping you all could give me some advice.
THANKS!!!
Comments
Are you sure that your insurance company will reinstate all eligible workers upon their rehire? Does your company propose any criteria other than need for health insurance on selecting who will or will not get company-pd Cobra, i.e., what constitutes need? Need for Rx? Illness or injury that needs medical attention? Wellness check?
I'm curious to hear from others.
Again, I think your primary focus should be on potential discriminatory administration and not tax ramifications.
The article about tax consequences was pretty much the only info I could find about it. And that's really why I've posted the question, because I'm sure there has to be other issues that come into play here.
Thanks for the feedback stilldazed! I always appreciate the advise of forum members!!
best wishes.