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Health Care Final 02-18-10 -   10.2 - COBRA Subsidy

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Health Care Final 02-18-10
Healthy State
Economic Recovery
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Action Plan
10.2 - COBRA Subsidy

How Is the Recovery Effort Helping Laid-Off Workers?
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Data Notes
Data Source: HCA form 941 quarterly income tax return to IRS   
Measure Definition:

Number of Assistance Eligible Individuals (AEI) for whom HCA is claiming subsidy; dollars claimed

Target Rationale:

Increase availability of coverage to vulnerable populations

Link to Agency Strategic Plan: Increases continued access to coverage for PEBB beneficiaries 
Relevance: Coverage enhances access to care.
Notes: (Optional)

Because subsidy is available for 9 months, claims may be submitted through September 2010. 

Also Available
Action Plan: yes
Extended Analysis: no

 Drill Down Measures

 Summary Analysis

  • For the period from July through December of 2009, HCA paid 65% of the COBRA premium for 1,035 former employees and dependents of state agencies and educational institutions covered through PEBB.  This figure includes some enrollees who received the subsidy in the second quarter of 2009 as well as newly eligible individuals, and the ratio of subscribers to dependents remains the same at 61:39.  To reimburse this subsidy HCA claimed $1,002,850 from the US Internal Revenue Service on its 4Q09 payroll tax return.
  • The American Recovery and Reinvestment Act of 2009 (ARRA) provided for a 65% subsidy of COBRA premiums, starting in March 2009, for up to 9 months for workers (and their dependents) involuntarily terminated between September 1, 2008 and December 31, 2009.  Employers collect 35% from the eligible individual, pay the full premium to the eligible individual's health insurer or self-insured plan, and claim the 65% difference from the federal government as an adjustment to the employer's quarterly payroll tax return.   Because HCA administers COBRA for most Washington public agencies and public higher education institutions, HCA itself pays the premium and claims the subsidy on their behalf.  The subsidy is greater than the balance on HCA's own tax return, so a cash rebate is due HCA from the Internal Revenue Service.  
  • The first HCA quarterly tax return reflecting subsidy activity was submitted for 2Q09 (April-June), reflecting subsidy activity for the March-June 2009 period, and the rebate was received during the third quarter.  The requested rebate for the third quarter is exactly what was received.