| Recent changes in benefits administration law have | | | | the number of participants grow, more businesses |
| made outsourcing payroll even more attractive to | | | | may be interested in choosing to outsource this as the |
| companies. | | | | work and liability tied to it will increase exponentially. |
| The American Recovery and Reinvestment Act of | | | | Some larger national payroll processing services |
| 2009, commonly referred to as the Economic Stimulus | | | | companies administer COBRA, while most local ones |
| Bill, was signed into law on February 17, 2009 by | | | | don't. Utilizing your payroll services COBRA |
| President Obama This law contains several significant | | | | administration has certain advantages over using your |
| changes which will directly affect employers and how | | | | health carrier's: a health care provider may just provide |
| their benefits are administered. | | | | COBRA for their specific health plan, but not include |
| First, a Temporary COBRA Premium Assistance has | | | | other eligible services, such as Dental. By choosing |
| been included in The American Recovery and | | | | your payroll outsourcing services provider to administer |
| Reinvestment Act. This COBRA Premium Assistance | | | | your COBRA benefits, you will eliminate the burden of |
| provides a subsidy of 65% of the cost of COBRA | | | | administering ALL eligible COBRA benefits, not simply |
| coverage for nine months to certain individuals. The | | | | health. In addition, some larger or multi-state companies |
| subsidy's provisions are effective immediately and plan | | | | may have several health insurance choices; relying on |
| sponsors must comply with them now. The number of | | | | your payroll outsourcing services provider to administer |
| participants in COBRA plans will dramatically increase | | | | COBRA eliminates this conflict. |
| over the next 24 months for the following reasons: 1) | | | | Second, The American Recovery and Reinvestment |
| Unemployment rates are now at 7.6% and growing 2) | | | | Act contains a "Making Work Pay" Tax Credit, which |
| The new stimulus act helps pay a significant portion of | | | | will be achieved through payroll deductions: 1) The |
| the employee COBRA contributions. The IRS has | | | | credit amount will be the lesser of $400 for an |
| made reacting to the much more onerous COBRA | | | | individual worker ($800 for married couples) or 6. |
| provision contained in the new law a top priority. As | | | | |