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CCH® BENEFITS — 06/16/10

One-Third Of Eligible Employees Take COBRA Subsidy, According To Preliminary Results In Spencer Survey

from Spencer’s Benefits Reports: One-third of terminated employees chose the 65% COBRA subsidy in 2009, according to preliminary results of the 2010 COBRA Health Care Continuation of Coverage Survey being conducted by Spencer’s Benefits Reports.

(Employers and administrators may still participate in the 2010 COBRA Survey online at http://www.zoomerang.com/Survey/?p=WEB22A6JEFSRSH).

In past Spencer surveys, as the eligibility rate rose, the COBRA election rate often dropped, as happened in 2008, just before the COBRA subsidy took effect). In 2009 preliminary figures, however, both the eligibility and election rates were high. The 33% election rate for COBRA by terminated employees is significantly above the 20% average in previous Spencer COBRA surveys. In addition, 18% of employees covered by health care became eligible for COBRA in 2009, well above the 11% average in previous surveys.

A recent Treasury Department survey of COBRA elections in New Jersey suggested that one-fourth to one-third of eligible unemployed workers enrolled in subsidized COBRA for continuing health insurance.

Congress has extended the COBRA subsidy several times, and in March the Senate agreed to another extension; however, the House of Representatives recently stripped out the COBRA extension in passing H.R. 4213, the American Jobs and Closing Tax Loopholes Bill, and a further extension is unlikely right now.

Spencer’s Benefits Reports has been collecting and analyzing COBRA survey information since1990. This year’s survey requests information concerning the costs, administrative procedures, and problems associated with COBRA and the COBRA subsidy initiated in 2009. The information reported will be collated and published in Spencer’s Research Reports on Employee Benefits, Spencer’s Benefits Reports on the Internet, and Spencer’s Compliance Guide for Health and Benefit Plans.

All survey participants will receive a free copy of the published survey.

The COBRA Health Care Continuation of Coverage Survey is an important source of information for benefit plan administrators nationwide and is regularly quoted in national and government publications. It is the longest-running national COBRA survey.

Everyone who completes the survey and includes a name and email address will be entered in a drawing to win one of three $100 American Express gift certificates.

To take part in the 2010 survey, visit http://www.zoomerang.com/Survey/?p=WEB22A6JEFSRSH.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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