Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

Meanwhile, the Senate is set to consider longer COBRA and unemployment insurance extensions. On Monday, Sen. Max Baucus (D-MT) introduced a $150 billion bill that would extend these benefits through December 31, 2010, as well as continue certain programs aimed at providing pension-funding relief, among other benefits. The American Workers, State and Business Relief Act of 2010 (pdf) was introduced as an amendment (S. Amt. 3336) in the nature of a substitute to the Tax Extenders Act (H.R. 4213). The tax extenders bill will now serve as the Senate vehicle to provide longer extensions to these and other expiring tax programs.

For more information on the Temporary Extension Act of 2010, see Littler's ASAP:  COBRA Subsidy Extended and Expanded by Steven J. Friedman.

Generally

The Law changes the original COBRA Subsidy rules as follows:

• Extends the time in which an individual may qualify for the COBRA Subsidy through February 28, 2010 (extended from December 31, 2009);
• Extends the amount of time from nine months to fifteen months that a former employee, who is an “assistance eligible individual” (AEI), may receive the COBRA Subsidy; and
• Individuals no longer have to be eligible for COBRA coverage by a specific date; rather the individual need only have a COBRA qualifying event that is an involuntary termination of employment occurring on or before February 28, 2010.

Who is Affected?

The Law affects the following:

• New AEIs, i.e., those individuals who qualify for the COBRA Subsidy due to an involuntary termination through February 28, 2010 and are ineligible to participate in another group health plan. See Littler ASAP dated February 2009 entitled Stimulus Package: An In-Depth Look at the New COBRA Subsidy in the ARRA.
• AEIs who stopped paying for COBRA coverage due to the end of the original nine month COBRA Subsidy period.
• AEIs who maintained COBRA coverage although their COBRA Subsidy ended.

Transition

AEIs whose COBRA coverage ended due to failure to pay for their COBRA premium between the time of the AEI’s original COBRA Subsidy end date and December 21, 2009 (“Transition AEIs”):

• Must be given the opportunity to retroactively pay COBRA premiums at the subsidized rate, up to a total of fifteen months.
• Transition AEIs must make their COBRA premium payment within the later of (1) February 19, 2010 or (2) 30 days after notice of the changes to the Law is provided to the Transition AEI.

Overpayments

AEIs who maintained COBRA coverage after the COBRA Subsidy period ended under the original provisions of ARRA and who continue to be AEIs (“Overpayment AEIs”), must be reimbursed for the difference between the amount paid and the subsidized COBRA amount via either a refund or credit towards future COBRA premium payments.

Notices

Notice of the COBRA Subsidy extension is required to be provided to the following individuals within the time indicated:

• Any individual who was an AEI on or after October 31, 2009.
  • Notice must be provided by February 19, 2010.
• Any individual whose COBRA rights relate to a termination of employment (whether voluntary or involuntary) and who would be eligible for COBRA coverage on or after October 31, 2009 through February 28, 2010.
  • Notice must be provided within the time that the original COBRA election notice rules require the employer to provide notice of COBRA rights (note that the notification of extension is in addition to the original COBRA Subsidy notices).
• Transition AEIs must receive information about (1) the COBRA Subsidy extension; (2) the right to reinstatement of COBRA coverage, and (3) the right to make retroactive COBRA premium payments at the subsidized rate (to bridge the time between the loss of COBRA coverage for failure to pay or late payment and December 21, 2009).
  • Notice must be provided within 60 days of the date the Transition AEI’s original nine month COBRA Subsidy ended.
• Overpayment AEIs.
  • Notice must be provided within 60 days of the date their original nine month COBRA Subsidy ended.

Next Steps

Identify

• Employees who are terminated and have not yet received their COBRA notice.
• Former employees who received COBRA notices but who have not yet elected COBRA.
• AEIs as of October 31, 2009 and determine if they are:
  • Transition AEIs; or
  • Overpayment AEIs.

Prepare Notices

• For newly terminated employees.
• For Transition AEIs.
• For Overpayment AEIs.

Send Notices

In essence, the bill would do the following:

• Extend the COBRA subsidy for an additional six months for a total of 15 months of coverage;
• Increase the 65 percent subsidy amount to 75 percent;
• Extend the subsidy to workers whose hours are reduced to the point where they would ordinarily lose entitlement to the COBRA coverage; and
• Extend by six months – to June 30, 2010 – the time period in which workers could become eligible for the subsidy.

In a press release, Sen. Brown stated that: “[u]nemployed workers should be able to focus on finding work, instead of worrying about how to afford medical care for their families,” adding, “This bill will make temporary health coverage more affordable and accessible for American families. No family should be one medical visit away from financial disaster.”

This bill has been referred to the Senate Committee on Health, Education, Labor and Pensions.

Photo credit:  graffoto8

Borzi currently works as a research professor in the Department of Health Policy, School of Public Health and Health Services, The George Washington University Medical Center, where she is involved in research and policy analysis involving employee benefit plans, the uninsured, managed care, and legal barriers to the development of health information technology. For 16 years until January 1995, Borzi served as pension and employee benefit counsel for the U.S. House of Representatives, Subcommittee on Labor-Management Relations of the Committee on Education and Labor. During the Clinton administration, Borzi served on working groups dealing with insurance reform, workers’ compensation and employer coverage.

Borzi is a charter member and a former president of the American College of Employee Benefit Counsel, and served as a member of its Board of Governors from 2000-2008. Borzi is also a former member of the Advisory Committee of the Pension Benefit Guaranty Corporation, and a current member of the Advisory Board of the Pension Research Council, the Wharton School, the University of Pennsylvania and a member of the Board of the Women’s Institute for a Secure Retirement (WISER). In 2008, Borzi was appointed by the U.S. District Court for the Northern District of Ohio to serve as a public member of the Administrative Committee for the Goodyear VEBA, an entity that was judicially established pursuant to a negotiated settlement agreement between the company, the Steelworkers and class representatives for the Steelworkers retirees.

DOL Withdraws Its Interpretation of the FLSA Regarding Relocation Expenses Incurred by H-2A and H-2B Workers

In a notice published in today’s Federal Register, the DOL announced that it is withdrawing for further consideration its interpretation that the Fair Labor Standards Act (FLSA) and its implementing regulations do not require employers to reimburse workers under the H-2A and H-2B nonimmigrant visa programs for relocation expenses even when such costs result in the workers being paid less than the minimum wage. The interpretation was published on December 18 and 19, 2008 regarding the H-2A and H-2B programs, respectively.

The NLRB Makes its Pilot ADR Program Permanent

The National Labor Relations Board (NLRB) has decided to make permanent a pilot alternative dispute resolution (ADR) program it established in 2005.  This voluntary program was instituted for the resolution of unfair labor practice cases. According to NLRB Chairman Wilma Leibman:

ADR programs provide the parties with several benefits, including savings in time and money, greater control over the outcome of their cases, and more creative, flexible, and customized resolutions of their disputes. Settlement discussions conducted with the assistance of an ADR neutral may broaden resolution options, often by going beyond the legal issues in controversy, and may be particularly useful where traditional settlement negotiations are likely to be unsuccessful or have already been unsuccessful. Our experience with the pilot ADR program demonstrates that participation in the program provides the parties with a process for expeditiously resolving their disputes, which serves to effectuate the purposes of the Act.

IRS Announces that Employees Who Accept Offer to Resign or Retire in Lieu of Layoff are Eligible for New COBRA Subsidy

In a March 24 webcast sponsored by the DOL, the Internal Revenue Service (IRS) stated that individuals who accept their employer’s offer to resign or retire to avoid further layoffs are to be considered involuntarily terminated, and therefore eligible for the new COBRA subsidies made available by the American Recovery and Reinvestment Act (ARRA), otherwise known as the stimulus package.