The State of New York runs a subsidy program for entertainment industry workers that enroll in COBRA.
From my experience dealing with the State of New York's program, I see the following areas that will possibly create heartache for employers and union funds...
1) Who gets the government money? Does the employer have to bill the government (after the participant enrolls in coverage) or does the participant apply for reimbursement after he/she has paid an invoice?
2) If the employer bills the government, are they required to provide coverage to the participant as soon as the participant pays his/her share of the bill? How long will the employer have to wait until the government pays their subsidized portion?
3)How much will it cost an employer that is outsourcing the administration of their COBRA benefits to have their vendor change the process to allow for the Government subsidy? Is the government going to offer a tax-break for that?
4)What about reimbursement to the Federal Government for money initially paid to subsidize a COBRA plan for an individual that was later rescinded? Muli-employer unions might have fun dealing with this problem if they grant health eligibility based on reported earnings. There may be cases when an employer report a participant's earnings late or incorrectly, forcing the participant to go on COBRA in order to avoid a break in coverage. After the earnings issue is resolved, the Union may retroactively replace the participant's COBRA coverage with normal health eligibility.
