Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

UPDATED

This week, both the Hartford Courant and the Hartford Business Journal,  have run lengthy articles suggesting that the COBRA subsidy -- which went into effect in February of this year -- is coming to end for most workers. 

Unfortunately, the articles miss the big picture of the law and, in doing so, add to the confusion surrounding the law.

So, let's take a moment to understand the context.

Before February 2009, laid off workers who wished to continue their health benefits had an option to do so but typically by paying the full amount of the premiums. They could do so under the law known as COBRA.

Then in February 2009, Congress passed a law that provided that workers laid off between September 1, 2008 and December 31, 2009, would be eligible to receive a subsidy from the government, in which the government would pay 65 percent of the premium for a nine month period.  This is what's been known as the "COBRA Subsidy".

So, this month, some workers who were laid off between September 1, 2008 and March 1, 2009 and who had been receiving this subsidy from the government, will lose that subsidy.  They will not lose their insurance; rather, they will revert to the existing COBRA law for coverage.

Nevertheless, the articles suggest that the benefits are ending for other laid off employees as well. That is not the case. Anyone who is laid-off through the end of 2009 may still be eligible to receive the nine-months of subsidies (and employers will still be responsible for processing such requests) so long as their are COBRA-eligible. At the end of each nine-month period, they can continue their health insurance benefits at the full premium rates.  The DOL has issued FAQ on the subject which you can find here.

[Note that if an laid off employee still has health insurance coverage through, say January 31, 2010 under an existing policy of the employer, then COBRA would not start until that time and the laid off employee would not be eligible for the subsidy.]

It is unclear, at this point, whether Congress will extend this subsidy any further. A bill has been introduced to do so but its prospects remain foggy.

What's also unclear is how many individuals are actually using the COBRA subsidy.  An estimate before the bill suggested that up to 7 million people would be eligible, but the numbers on the actual amount of people using the subsidy have yet to be released by the government.  

For employers, absent passage of another extension, the next several months are likely to be another confusing time. 

Employees who were laid off before December 31, 2009 and who are otherwise COBRA-eligible may continue getting the subsidy, but those laid off after December 31, 2009 (or those who are not COBRA-eligible until after December 31, 2009) will not.  As such, employers will need to amend their COBRA notices and forms yet again to revert back to the former forms that they used before the subsidy.

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Leave it to librarians to come up with a great new resource page for learning about Connecticut's unemployment laws.

I can hear the chuckles now. Librarians? 

Yes, librarians.

As long-time readers of the blog know, one of the best kept secret resources for attorneys and businesses are the judicial branch law libraries.  They continue to serve as a clearinghouse for lots of information that is scattered among the Internet.

The librarians latest creation is a pathfinder page on the state's unemployment compensation laws.   Among the items of information: various resource guides from the Connecticut Department of Labor and Office of Legislative Research; links to the relevant Connecticut statutes and regulations; library materials; and useful websites.  It's a great place to start research on the subject.

The pathfinder isn't perfect. For example, although it links to documents helping to explain what an employee's rights are, it doesn't link to the DOL's "The Employer's Guide to Unemployment Compensation" -- a must read for employers who are addressing the issue of unemployment compensation. 

The Connecticut Department of Labor also has additional information helpful to employers on its website (that isn't listed on the pathfinder), including information on: Eligibility Requirements, Quality Control Brochure for Employers, Rapid Response Information Packet, Shared Work Program (as alternate to layoffs).

So, while the judicial branch law libraries have provided a great resource to start looking at the unemployment compensation issue, employers should also be aware of other resources out there. But it is a better place to start research than a Google search.  

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The Employee Benefits blog has a terrific post this week explaining the "Gross Misconduct" rule for COBRA Coverage.

For those unfamiliar with the lingo, The Consolidated Omnibus Budget Reconciliation Act (COBRA) (among other aspects) describes rights that employees have to continue their health insurance after their employment as been terminated (and for some other reasons too).    But there is an exception: When the employee is terminated for "gross misconduct", the benefits cease.  What does that mean? Well, the Act doesn't define it.

But the Employee Benefit blog shares some insight from one case about what it means. 

Three things are very important about this decision.  First, the court did not find that any “criminal” conduct was required to meet the “gross misconduct” definition.  Gross misconduct can be an intentional, deliberate, extreme and outrageous that “shocks the conscience.”  It can be “reckless or in deliberate indifference to an employer’s interests.”  ...

Second, the employer has the burden of establishing the termination was for “gross misconduct.”  ... It must be the primary reason, not one of many.

Finally, the employee and potential COBRA beneficiaries have to be notified of the determination that COBRA is not being offered because of the termination for gross misconduct.  

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What's the latest trend that human resources departments are using to control costs? According to a Business Week article in this week's issue, it's "Dependent Eligibility Audits".  What are they? The article explains:

Dependent eligibility audits," in which companies demand proof that spouses and children qualify for medical benefits, are swiftly becoming both fashionable and financially rewarding for companies frantic to curb the runaway costs of health coverage. Companies such as Boeing, General Motors, and American Airlines have been asking workers to send in marriage licenses, birth certificates, student IDs, and tax returns. The goal: to cull the benefits rolls of ineligibles, which could include ex-spouses, stepchildren who live elsewhere, or 29-year-old college grads still being claimed as dependents.

While this may appear to simply be a "benefit" issue, some companies are taking this issue serious, including firing some employees, according to the article.

At many companies, missing the deadline for sending in paperwork risks having a dependent's coverage dropped. Still, there are usually appeal windows of up to 60 days during which coverage can be reinstated if employees show proof. A few companies, however, are getting tough on those who procrastinate or are caught signing up an unqualified person. Some have made employees wait until the next open enrollment period before reinstating insurance if they repeatedly missed deadlines. [One consultant] said one client even fired workers discovered to have enrolled ineligible people because they violated its stringent code of conduct.

While such audits would, at first glance, appear to implicate privacy concerns, employees seeking benefits from a company routinely have to provide information on their dependents anyways. The risks in conducting the audit therefore have to do more with perceptions and managing employees, rather than privacy concerns. 

For the HR professionals there, feel free to post your experiences, if any, with such audits and whether this is indeed, a developing trend.

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A few posts this week caught my eye:

• First, the HR Carnival has a great post this week about various HR issues, including how to train managers better.  And, best yet, you'll find a link back to this blog.  Thanks to the writers of the Carnival for the reference.
  
• Kris Dunn, over at HR Captialist,  has an interesting post about how HR professionals can help their companies keep benefit costs down. As Kris says, "If You Don't Have a Meaningful Answer to this Question From Your CEO, Update Your Resume..."
  
• Evil HR Lady, has an informative post as to how employers can prepare for terminations and how to educate managers about the right ways to do so.
  
• Workplace Horizons has been right on top of the Congress' consideration of ENDA, the Employment Non-Discrimination Act.  Near daily updates about the rumors of various amendments have been going up and its a useful site to keep track of certain pieces of legislation. 
  
• And finally, The Employment Blawg has been posting a series of hypotheticals on different workplace situations including violence, workplace and overtime.  As stated on the blog "Read Trucks and Guns: An Employment Law Fable, Part I (Overtime for Truck Drivers) for the whole story. . . . It ends with an HR manager getting shot by the driver (just hypothetically)."

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