Question of the Month

Question: What is the COBRA Subsidy Extension?

Answer:  

President Obama signed HR 4851 ("Continuing Extension Act of 2010") into law on April 15, 2010 providing an extension of the fifteen month subsidy to employees involuntarily terminated from April 1 through May 31, 2010. The previous extension expired March 31, 2010.

Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee's employment. The involuntary termination must generally occur during the period that began September 1, 2008 and ends on May 31, 2010.   The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months. Assistance-eligible individuals generally are those qualified beneficiaries who lose coverage as the result of an employee's involuntary termination between 9/1/08 and 12/31/09, later amended to 2/28/2010, then extended to 3/31/2010, and extended again to 5/31/2010, who elect COBRA coverage, and who are not eligible for other group health coverage or Medicare.    The COBRA subsidy extension extends the premium subsidy by six months to a total of 15 months.

For additional, visit the The Department of Labor FAQ's.

Past Questions of the Month

Question: What are the ERISA Bonding Requirements for our 401k plan?

Answer:   The Employee Retirement Income Security Act (ERISA) provides that all plan Trustees who "handle" the plan funds or other property must be bonded.  A fidelity must be obtained at the start of each reporting year from a surety insurance company in the amount of at least 10% of the amount of the plan funds handled from the previous reporting year ($1,000 minimum and no deductible).  It must provide for a discovery period of one year.  A blanket bond, either multiple-penalty or aggregate penalty, is acceptable.    If you invest in certain types of so-called "Non-qualifying Assets" such as real estate, limited partnerships, or other non-marketable securities and items not regularly traded on an established market, your bonding requirement may be increased or an an audit may be required. 

Question: Can mileage for trips to the doctor be reimbursed from my FSA/HRA/HSA? 

Answer: Yes. You are eligible to be reimbursed for mileage expenses incurred for a medical reason. The standard rate for 2008 is $0.19 / mile, down 1 cent from 2007. For more information, see the IRS Revenue Procedure 2007-70, available at: http://www.irs.gov/pub/irs-drop/rp-07-70.pdf