Compliance February 12, 2009

COBRA Expansion Provision Dropped from Stimulus Package

February 12, 2009 (PLANSPONSOR.com) - Employers can breathe a sigh of relief with word that a provision that would have expanded their COBRA obligations was dropped from the economic stimulus bill House and Senate conferees reached an agreement on Wednesday.
Reported by

The agreement eliminated the original House provision that would have expanded COBRA coverage until Medicare eligibility for COBRA-eligible individuals who are 55-years or older, or who have 10 or more years of service with their employer, the ERISA Industry Committee reported in a news release. 

ERIC was one of several employer groups that wrote letters to Congress in opposition of the expansion, expressing concerns over the cost to employers and the possibility of active worker benefits being reduced as a result (see Employer Groups Voice Concerns over COBRA Extension ).

ERIC President Mark Ugoretz said in the news release: “COBRA coverage is the least efficient and least effective means of providing health care coverage to those who need it.  We believe there are better ways…”

According to ERIC, the stimulus compromise failed to include additional funding relief for defined benefit pension plans. The Worker, Retiree and Employer Recovery Act, signed into law by former President Bush in December, offered some relief on funding requirements (see Bush SIgns RMD, Pension Relief Bill ).

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