Domestic Partner Exclusion in ARRA COBRA Premium Subsidy
Category: 2009 Stimulus, Common Problems
Topics: arra, domestic partner
We have finalized our plans to enable administrators to exclude the 65% government subsidy enabled by ARRA in both TravisCobra and WebCOBRA to domestic partners and other ineligible dependents.
In the guidance 2009-27, the IRS helps define which dependents are eligible for the 65% government subsidy and which are not.
Q-23. Does the premium reduction apply to portions of the premium attributable to COBRA continuation coverage for individuals who are not qualified beneficiaries?
A-23. No. The premium reduction is limited to premiums attributable to COBRA continuation coverage for assistance eligible individuals, defined as qualified beneficiaries who elect COBRA continuation coverage and whose qualifying event with respect to the coverage is the involuntary termination of employment of a covered employee during the period from September 1, 2008, through December 31, 2009. A qualified beneficiary with respect to a covered employee under a group health plan is the spouse of the employee under Federal law or a dependent child of the employee under Federal law if, generally, the spouse or dependent child was a beneficiary under the plan on the day before the qualifying event. Qualified beneficiary also includes a child who is born to or adopted by the covered employee during the period of COBRA continuation coverage. Subject to the preceding sentence, qualified beneficiary does not include a spouse or dependent child not covered before the qualifying event and added to the coverage during a later enrollment period. In addition, if an individual does not meet the definition of a qualified beneficiary under Federal COBRA, the individual’s coverage is not eligible for the premium reduction under ARRA, even though such an individual may be covered under a plan by its terms, or as required by State law.
Our users have described this issue as only the Domestic Partner, but based on the IRS’s guidance, our opinion is that the problem is defined more broadly as Ineligible Dependents.
For any automated system, trying to calculate how much the Domestic Partner’s share of a $1,000 premium would be an impossibility. Several methods have been suggested to us, leading us to conclude there is no one universally accepted method to determine that cost basis.
As such, we will be allowing, in a future release, users to define the ARRA Exclusion on the QB’s benefit assignment record, which maps a QB to a tier level such as QB and Family.
The ARRA Exclusion will be defined and calculated by the user. For example, if we have a $1,000 premium with the standard 2% admin fee, the normal cost would be $1020, as shown by our previous calculation posts.
| Premium With Admin Fee | $1020 |
| Normal Subsidy Amount | $663 |
| User Defined ARRA Exclusion | $300 |
| Premium Subject to ARRA after Exclusion | $720 |
| New Subsidy Amount | $468 |
| Amount QB Owes | $552 |
We don’t yet have a timeline for delivery of a TravisCobra and WebCOBRA release that will let you enter an ARRA Exclusion. Once we have finished the programming, we will post to the Blog including screenshots and more detailed information.
What you can do now is calculate the ARRA Exclusion for your plans that allow dependents that the IRS has deemed ineligible. Then, once we deliver the release to you, you’ll be able to enter them as QBs enrolled in ARRA, or proactively before if you choose.
17 Responses to “Domestic Partner Exclusion in ARRA COBRA Premium Subsidy”
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April 20th, 2009 at 11:20 AM
This is great. Can you comment on whether or not you will be including updates to the letters and coupons that print premium due information to the PQB’s? Specically the premium blocks, the enrollment forms, optional enrollment forms, premium computation forms and coupons.
April 20th, 2009 at 01:45 PM
Also do you think it would be possible to add a flag at the dependent level to identify each dependent as a QB or Non-QB? The downloader could also be modified to include a filed that could be loaded into the system.
This would help to identify the participants and possibly in the future allow for some automation of the calculation of the ARRA Exclusion amount.
April 20th, 2009 at 03:29 PM
@Denise: Most all of our future ARRA system enhancement updates are going to come from the Ideabook. So make sure you log-in and vote!
April 20th, 2009 at 03:38 PM
@Denise: You can currently identify PQBs who you import into the system by using field 180. Please refer to Appendix B in the TravisCobra User Manual.
April 21st, 2009 at 12:45 PM
Is it possible to put the ARRA enhancement request on the Ideabook at the beginning of the list? It would make it easier to monitor. Also, if an enhancement is requested for Travis COBRA and can also be applied to Web COBRA do two separate ideas have to be posted?
April 21st, 2009 at 01:51 PM
@Lyn: Two separate postings have to be made for TravisCobra and WebCOBRA.
April 22nd, 2009 at 07:45 AM
We are now starting to verify QB’s what I have notices regarding the report. If in April we verify a QB and they have paid in March for March we have to re-run March’s premium report. Is there any other way; because this will be a nightmare since the QB’s have an additional 60 days to elect. Please advise.
April 22nd, 2009 at 02:15 PM
@Rose: You do have the option to run the premium reports for multiple months. If you have a suggestion on how you about how these reports should work, please go to the Ideabook and post it!
April 23rd, 2009 at 07:30 AM
Can you please give me instructions on how to enroll a QB after 2/17 and then instructions for before 2/17 so the ARRA dollar amounts will show on the ledgers, or direct me to the questions and answers on the blog that would answer this. Thank you.
April 23rd, 2009 at 02:52 PM
@Cindy: There isn’t a difference between enrolling someone before or after 02/17. However, if you want to actually apply the ARRA Stimulus to a QB record, you’ll need to enable the “Authorize ARRA” option for the QBs who chose to enroll.
April 27th, 2009 at 07:22 AM
We charge based on all QB’s who we re-notified. I know the QB’s who were non-commenced etc. will show on a notification report; which is great. The QB’s who are enrolled we also charge for, but what report would reflect these people? We are not looking for the BA of all enrolled. Please advise.
April 28th, 2009 at 10:38 AM
Hello everyone,
I commented on a item under the ideabook regarding the ARRA Payroll Reduction Report. Please go out and vote on this item. We are having so many clients requesting these changes.
April 28th, 2009 at 02:57 PM
@Rose: You should be able to use the QB Status History Report for this. You can specify the date range for when the QB’s had the enrolled status, and make sure to choose only the status of Enrolled in the status dropdown menu.
April 29th, 2009 at 11:15 AM
I don’t see a QB Status History Report in TravisCOBRA. Please advise.
April 29th, 2009 at 12:58 PM
I have a question about the ARRA Open Enrollment letter. It seems to be printing for anyone who enrolls now in regular COBRA (non-assistance) even though they already received a renotification of their rights. Is this a known issue that will be addressed or do I need to contact support about this?
April 29th, 2009 at 04:13 PM
@Rose: Sorry, that is a WebCOBRA report. In TravisCobra, you can use the PQB Active report or the PQB Terminated report. The Active report will show pending and enrolled PQBs and the Terminated report will show PQBs who have termed.
April 29th, 2009 at 04:18 PM
@Rebecca: If the Open Enrollment letter is printing for everyone, please contact Travis Support.