2% Administrative Fee for COBRA under Subsidy Arrangement
Posted: 21 April 2009 11:39 AM   [ Ignore ]
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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.
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Posted: 22 April 2009 09:53 AM   [ Ignore ]   [ # 1 ]
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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.

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Posted: 22 April 2009 10:18 AM   [ Ignore ]   [ # 2 ]
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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).

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Patrick Della Valle
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