ARRA, COBRA and Unions

[Guest mary33]

I am having a hard time finding out whether my husband would qualify for the ARRA COBRA subsidy.

He is a member of the American Federation of Musicians (AFM). Like SAG, AFM bases its member eligibility for health benefits based on earnings from the previous year.

My husband did a small piece of discrete work (a project that was completed [nobody was fired, nobody quit, the work was just completed]) in 2007. This 2007 work qualified him for health benefits through AFM, his union, for 2008. In 2008, my husband didn't have any AFM work and thus did not qualify for health benefits for 2009. The union health plan thusly COBRAd him starting 1/1/09. He elected COBRA and has been paying his premiums.

We get in the mail a notice saying he may qualify for the ARRA subsidy. I spoke to the union plan administrator and was told he would not qualify since his employment was not terminated in the late 2008 / early 2009 window. While that is true, it struck me as strange since the plan is the union's and eligibility is determined by being earned-eligible for a past period. It would seem to me that involuntary termination from the health plan due to a failure to meet the earnings requirement and thus being COBRAd would be the critical event.

I was debating having my husband send the form in and claim that the union was his employer and that the involuntary termination from the health plan was the actionable event and thus date of importance.

I can see the union's point of view in that they didn't pay my husband's wages (they required a contribution from the 2007 employer to qualify my husband for eligibility) and thus aren't responsible to subsidize my husband's health premiums. Still, it seems strange in that nobody who is a member of this type of union (health plan eligibilty based upon previous year's earnings) would ever qualify for the ARRA subsidy.

Maybe that's how it's supposed to be. I don't know. In any event, the amount of money at stake is substantial to us so if anyone could shed some light on this, I would be grateful.

Mary

[Chaz]

In order to eligible for the COBRA subsidy, the statute specifically requires that the involuntary termination of employment occur from September 1, 2008, through December 31, 2009. Unfortunately, it does not matter when the coverage itself was lost. Based on your description of the facts it does not appear as if your husband qualifies for the subsidy.

[oriecat]

Unfortunately, I agree with the Union. The first two questions on the AEI form that determines eligibility are:

1. The loss of employment was involuntary.

2. The loss of employment occurred at some point on or after September 1, 2008 and on or before December 31, 2009.

It's not about when you lose coverage under the plan, it's about loss of employment. Your husband did not have a qualifying loss of employment.

[GMK]

it does not matter when the coverage itself was lost.

Just a reminder that it will matter at the end of the year.

From Q & A-13 in Notice 2009-27: "If the loss of coverage is after December 31, 2009, the individual cannot become an assistance eligible individual."