[Welcome Industry Radar readers]
Just when you thought it was safe . . . the land shark is at your door.
So you thought the Porkulus Bill and the ARRA (American Recovery and Redundancy Act) was a good deal for those who opt for COBRA, right? After all, your employer is required to pay 65% of your COBRA premium for up to 9 months so life should be good.
Not so fast Sparky.
By any chance did you have a Flex (FSA) plan in place for your group health insurance? If so, there may be a gotcha.
According to the folks at Conexis, this little goody is buried in the law according to a recent release from your friends at the U.S. Treasury.
COBRA premium reduction is available for any group health plan EXCEPT . . . vision only, dental only, mini-med plans, and . . . those administered under Section 106(c) as part of a flex spending plan. (See the bottom of page 3 and top of page 4 of the linked document).
I knew you were.
Some have commented and emailed regarding the interpretation (above) of Treasury notice 2009-27, indicating perhaps Conexis missed the mark. Here is a direct quote from that notice.
Q-27. Is the premium reduction available for COBRA continuation coverage under a vision-only or dental-only plan?
A-27. Yes. The premium reduction is available for COBRA continuation coverage of any group health plan, except a flexible spending arrangement (FSA) under section 106(c) offered under a section 125 cafeteria plan. This includes vision-only or dental-only plans and “mini-med plans,” whether or not the employer pays for a portion of the costs for active employees. The premium reduction is not available for continuation coverage offered by employers for non-health benefits that are not subject to COBRA continuation coverage, such as group life insurance.
You be the judge.