Ouida Peterson is to benefits what Paula Deen is to cooking – except maybe without all the sugar and butter. Don’t let the charming Southern drawl fool you.

Peterson, VP of education at Conexis, certainly didn’t sugarcoat the facts or butter up benefits pros about their obligations to maintain COBRA compliance during her remarks at today’s Compliance Summit, hosted by Employee Benefit News.

Noting that in her multiple speaking engagements throughout the year, “I can never use the same session handout two weeks in a row,” Peterson acknowledged the constantly changing COBRA regulations – including yet another subsidy extension just last Friday.

Determined to “teach COBRA in an hour,” Peterson brought her own unique brand of Texas straight talk to what employers can and can’t do regarding COBRA and the COBRA subsidy.

“I won’t even take questions on what’s voluntary or involuntary [termination], because if you raise your hand, it’s involuntary,” she said, citing several common scenarios where employers believe a termination is voluntary, including:

- “No call, no show, no job” policies. Even though many employers might consider an employee willfully not showing up for work voluntarily quitting their job, they’d be wrong, Peterson noted, and thus eligible for COBRA and the COBRA subsidy.

- An employee who gives notice with a certain end date, but their manager says, “Well, why don’t we just make today your last day?” That’s an involuntary termination, Peterson said, and COBRA eligible.

- Mandatory retirement policies – because “retirement is just termination with a party,” after all, she said.

The only scenario where an involuntary termination is actually voluntary, Peterson said, is death. “If an employee dies, their survivors are not eligible for the COBRA subsidy. So, the spouse and children aren’t eligible, but the jerk you laid off for not doing a good job is. Anyone besides me have a problem with that?”

Regarding eligibility of laid off workers, Peterson noted that it’s important for pros to know that if a former employee becomes eligible for other coverage under a new job, they can decline it and maintain COBRA benefits, but s/he is no longer eligible for the subsidy.  In addition, the employee has 30 days to inform you that s/he’s not eligible, or face penalties of 110% of income tax.

“There’s some teeth in this law,” Peterson said, “and they’re pointed in the right direction – at the individual.”

Despite being a tough teacher, Peterson sympathized with you pros trying to keep track of the different tweaks that accompany each subsidy extension.

“I’d give employee COBRA for free if [Congress] would just extend it to the rest of the year and leave it alone,” she said. “The expense of COBRA administration has gone up and up because you’ve had to send out one letter, then another, then another. This stuff is getting too wild.”

However, she intimated that things likely won’t calm down anytime soon. “As for the COBRA subsidy, I hope you like it because I don’t think it’s going anywhere anytime soon. there’s even been some talk of extending it for another four years, until the exchanges [created under health care reform] go into effect in 2014.”

Subsidized COBRA til 2014?! Comment away.

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