Continuing health insurance
We are all creatures of habit. For me, the day after the end of tax season, usually April 16, is the perfect example. I always take that day off work. I really enjoy preparing taxes, as do my co-workers, but the pressure is so intense during those last few weeks that a day off is needed to at least partially recharge the batteries, so to speak.
Since Meijer opened on Ten Mile Road several years ago, my first stop of the morning has been there to buy an all-species fishing license. All fishing licenses expire on March 31 and, since I am rather tied up from April 1 through April 15, in order to legally jump in the Rogue River, I need a new license. I was rather pleased to see that 28 dollars bought me that all-species license-the same fee as last year. I thought I had heard the fees were going up by 10 dollars, but the state legislature must have felt sorry for us fishermen and decided to leave the fees the same.
After getting that license, I head back home and take stock of what my garage looks like. It can take some straightening up, to say the least. It’s also time to switch recreation pursuits. Since bowling is finished, that must mean it’s time to start golfing. I get out the golf clubs and analyze the equipment in my bag. I’m still holding out hope for a round in the 70s and a hole in one, so I have to figure out what piece of technology is out there that just might allow me to get into the 70s and get that hole in one.
It’s also time to think about playing softball. My expectations are substantially lower when it comes to softball. I plan to not pull any muscles this year, not make too many fielding errors-no more than six for the year-and to have an on-base percentage of at least 0.500. With proper stretching before each game, I might not pull any muscles. With a rather loose definition of “not too many” fielding errors, I most likely can meet that goal. Finally, I use the “on-base” percentage of calculating 0.500 instead of straight batting average, because that allows me to use all means of getting on base, including hits, walks, fielder’s choices, and errors to reach 0.500.
After I’m through with those items, I do take some time to look around the house and try to figure out the sequence of completing all of the outdoor projects my wife, Deb, has laid out for me. After all, they do have to be worked in amongst the fishing, golfing and softball games. Now that takes some real calculating.
Something else that takes a lot of calculating and analyzing is all of the technical aspects of the American Recovery and Reinvestment Act of 2009 that was signed by President Obama on February 17, 2009. In previous articles, I have explained many of the provisions as relating to individual taxpayers. This week, I would like to highlight the provision titled Subsidized COBRA Continuation Coverage.
Under the COBRA rules in general, displaced workers can buy health insurance for up to 18 months after they are terminated. Under the new law, an “assistance eligible individual” (AEI) who pays 35% of his/her group health premium to his/her ex-employer is treated as having paid the entire premium. The employer then gets a subsidy from the federal government for the other 65%.
The definition of an AEI is a person who meets three requirements. First, the person must have been involuntarily terminated by the employer. Second, the termination must have occurred between September 1, 2008, and December 31, 2009. Third, the person must actively elect COBRA Continuation Coverage.
The third requirement is important, because many taxpayers who were terminated between September 1, 2008, and February 17, 2009, might not have elected COBRA Continuation Coverage because paying 100% of the health insurance premium was flat-out unaffordable.
Now those taxpayers are given a second chance to continue health insurance coverage at the substantially reduced rate of 35% of the original premium. The employer must notify the person that he/she is given 60 days to elect to pay the 35% for full coverage-35% just might be affordable. The reduced rate will apply for up to nine months and is meant to give the displaced worker more time to find a job with benefits. This subsidy will help workers when cash flow is at a premium. This is one of those complicated tax provisions that is a good thing. This is Jerry Coon signing off.
Jerry Coon is an Enrolled Agent.
He owns Action Tax Service on
Northland Dr in Rockford.
His email is email@example.com