Insider Pro-Tips from the VantagePoint Team:
Employee Contributions:
Q:) If employee contributions are taken from pay to cover a portion of insurance premiums plans, how will this money be collected when there are no paychecks?
A:) You can take larger deductions before and after the time off, or request payment on a pre-set schedule.
Q:) Are you also offering Voluntary plans to your staff?
A:) The carrier may be willing to make some changes during a temporary layoff. Ask for options.
COBRA Triggers
Q:) Can you continue to pay for health benefits when a one-month layoff extends into two or three?
A:) Employees don’t have to be terminated or permanently laid off to be eligible for COBRA. Make sure you are clear in your obligations and communication to the staff when the layoff starts.
Triggering COBRA doesn’t necessarily mean employees will lose coverage. Once the employee returns to work, they can be reinstated after the layoff.
Q:) What if we have under 20 employees?
A:) COBRA rules, and your obligations, are different. Identify both your budget to continue benefits and administrative considerations when crafting this policy.
Don’t automatically say you will cover employees for 45 days if it leaves you figuring out COBRA costs and billing for partial months.
For proper guidance, most firms use an outside service for COBRA administration.
1,000 Hours
Be aware of your retirement plan eligibility requirements and potential impact on year-end discrimination testing. For many plans, employees must work a minimum of 1,000 hours to maintain eligibility for during the plan year.
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