What to do about health-care benefits for terminated employees

Nov. 18, 2010
Tim Twigg and Rebecca Crane, from Bent Ericksen & Associates, explain the requirements for subsidizing former employees' health-care continuation benefits.

By Tim Twigg and Rebecca Crane

Q. I just terminated a dental assistant. She had good technical skills but was moody, belligerent, and certainly did not demonstrate the customer-relations standards for which we strive. My state has a mini-COBRA requirement that was modified by some federal requirement a year or so ago. Am I still required to subsidize my former employee's health-care continuation benefit?

A. The American Recovery and Reinvestment Act (ARRA) required a 65% COBRA employer subsidy to eligible individuals involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009. This was also applicable to state mini-COBRA requirements such as yours. The subsidy was extended three times, most recently for those involuntarily terminated on or before May 31, 2010. It does not appear that the subsidy will be continued for employees who are involuntarily terminated after May 31, 2010.

Therefore, individuals such as your dental assistant, who are involuntarily terminated on or after June 1, 2010, are not eligible for the ARRA COBRA subsidy and must pay the full cost of their COBRA coverage. Those who were involuntarily terminated prior to June 1, 2010, and who are currently receiving the COBRA subsidy are not affected, although they will lose the subsidy once they reach the maximum subsidy duration of 15 months.

The opinions expressed above are based on the writer’s comprehensive background as a human resources professional and the policies in our Bent Ericksen & Associates products having been reviewed by legal counsel. The writer is not an attorney and the advice provided in this message should not be construed as a legal opinion. If you have legal questions after considering the advice and reading any materials referenced, it is recommended that you consult with your attorney.

Author bios
Tim Twigg is the president of Bent Ericksen & Associates, and Rebecca Crane is a human resource compliance consultant with Bent Ericksen & Associates. For 30 years, the company has been a leading authority in human resource and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. To receive a complimentary copy of the company’s quarterly newsletter or to learn more about its services, call (800) 679-2760 or visit www.bentericksen.com.