More unemployment benefits mean more work for Finance

Tax Day brought more than long post office lines — it also brought two more months of unemployment benefits to many people. And a new to-do list for Finance.

After allowing it to expire April 5, Congress passed yet another extension to the COBRA premium subsidy. Here’s the lowdown on The Continuing Extension Act of 2010.

Compared to the previous few extensions, this latest one is pretty straightforward:

• Employees who are involuntarily terminated through May 31 are now eligible for the COBRA subsidy.
• The extension applies retroactively to April 5 – the date the extension ran out last time.

That means your company could owe some checks to certain people. The feds estimate some 200,000 workers lost their jobs in the window between when the last extension ran out and the new one passed.

To stay in compliance, Benefits, Payroll and HR will need to seek out people who lost their coverage as of April 5. Look for anyone who paid the fully unsubsidized premium from April 5 to April 15, when the extension was passed.

Keep your eye out, too, for new model notices.

More than just layoffs count for coverage

Even if you haven’t had an official layoff, there may be folks who qualify for the COBRA subsidy. Some less dramatic (and quite common) cost-cutting measures count, too.

Here are some examples of what the Department of Labor considers to be “involuntary terminations”:

• a reduction of hours which knocks an employee out of eligibility for healthcare benefits
• temporary furloughs
• any layoff with the “right of recall”
• when an employee who is a reservist or a member of the National Guard is called to active duty
• the accepting of a voluntary severance offer with a package, and
• for unionized firms, an employer lockout (strikes don’t qualify).

This probably isn’t the last we’ve seen of these extensions – Congress is already bucking for another one to last the rest of the year. So it’s critical to be sure you’re covering everyone you should ASAP.

Check back here — we’ll keep you updated.