With regard to the federal subsidy who pays the 2% administrative cost to the employer? Under COBRA continuation coverage the employer could charge 102% of the premium. Does the 2% disappear in a subsidy situation?

Jonathan F. Cohen, Esq.
APRUZZESE, McDERMOTT,
MASTRO & MURPHY,P.C.
Somerset Hills Corporate Center
25 Independence Boulevard
P.O. Box 112
Liberty Corner, NJ 07938
Tele: (908) 580-1776
Fax: (908) 647-1492
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Thanks, Patrick.  Once again you are on target.  DOL FAQ for Employees (No. 11) corroborates your advice:

http://www.dol.gov/ebsa/faqs/faq-cobra-premiumreductionEE.html

Q11: Does the 35% I am required to pay include any administrative fees plans are permitted to charge or do I need to pay that fee separately?
If you are an Assistance Eligible Individual, you will only need to pay the amount that is 35% of what you would otherwise pay for your COBRA coverage, which already includes any administration fee.

Great…I guess the only issue is whether the employer pays out the fee (in whole or part) to an administrator, in which case they may want to re-negotiate the fee (b/c the employee is now not paying the entire administrative fee amount).