In general, yes, although employers involved in this practice should be careful. In particular, if the health plan is self-insured and the subsidy is not generalized, such a scheme could be considered discriminatory under the internal income code. In addition, if the employer agrees to cover all or part of the costs of COBRA coverage, it should be clear (for example. B in the former employee`s severance agreement) that the obligation to pay depends on the timely choice and the merits of the employee for COBRA coverage. The agreement should also specify the subsidized plans and the extension of the subsidy to purely salary or family insurance. In both cases, the terms of the agreement are not addressed to COBRA. Therefore, the question remains whether the applicable COBRA period begins from separation/departure or beyond. There are many reasons why laid-off employees choose COBRA over other insurance options. Some do not want the wrath of the buying market coverage, or see some attractive market choices. Others simply prefer the devil they know – why are they likely to buy a new plan that might not cover the necessary services and preferred doctors, or have horrible services? In addition, the subsidized COBRA is offered to some individuals as part of a redundancy package or proposed by a new employer, who is willing to pay COBRA premiums for coverage according to the former employer`s plan. The Tribunal stated that employers were not required to ensure that COBRA notifications were actually received and found that the employer and benefit manager had provided uncontested evidence that they had sent two COBRA voting notifications to an address that the employee had confirmed was correct and that the employee had not chosen COBRA coverage.

However, there remained a dispute as to whether the premium deductions constituted a waiver of cobra`s voting obligation to vote on the severance contract, so the court granted that right. In the absence of clear instructions, an employer may consider one month`s cobra severance pay – or even deduct all funds and let former employees decide how to spend them (whether it is COBRA, a market plan, budgetary expenses, etc.). In a difficult situation, it will be the greatest financial flexibility. 5. Can a worker pay his COBRA premiums before taxes on severance pay? No no. An employer may ask a selected employee to pay up to 102% of the cost of medical care to continue to cover COBRA. The 102% represents the total premium (share of employees, plus the employer share) plus an administrative tax of 2%. Although many employers subsidize COBRA, especially as part of a severance package, this is not necessary. As I said before, cobra rules are complex! Each termination is different and severance agreements vary; We advise you to be advised in the handling of COBRA cases in termination situations. In both cases, not taking COBRA into account could extend the coverage period beyond what the employer had in mind (and beyond what each insurer will cover).

Therefore, severance pay must be clearly rewarded with any confusion. Some employers subsidize COBRA with the best of intentions as part of their severance package.