Thursday, April 16, 2009

COBRA/ARRA: The State Fair Edition

Previously, we noted that some states have so-called "mini-COBRA" laws which apply to smaller groups (under 20 employees). There was some confusion as to how COBRA/ARRA would apply in these situations, which has now been cleared up a bit, thanks to (no kidding!) Anthem.
Readers may recall that the new "regular" COBRA rules require the employer to bear the cost of the employees' subsidy; the rules for "mini-COBRA" differ in that they require the carrier to, um, carry those costs, and then (hopefully) recoup them through their own payroll tax filings.
While one may enjoy the "schadenfreude" of the carrier being put in the position of premium payer, it would be well to remember that these costs are actually borne by their insureds (that would be thee and me). Something about the Law of Unintended Consequences.
And, of course, these folks will be eligible for the subsidy effective last September (some 7 months ago). That could end up being a nice chunk of change coming out of carriers' coffers.
And ultimately, our wallets.
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