Do you know what an “involuntary termination of employment” is?

Even if you think you do you should be careful because the law was modified in February ’09. The modification will allow employees to continue their health plan coverage while only paying 35% of the premium IF they experienced an “involuntary termination of employment.” The 65% subsidy applies only to the portion of the premium that is actually charged to the employee.

According to the IRS, your employees are eligible for the subsidy if:

  • The employer fails to renew a contract
  • An employee voluntary termination for a good reason
  • A resignation
  • Retirement
  • “Voluntary” termination that is not actually voluntary
  • Involuntary reduction of hour to zero hours (such as layoff or furlough)
  • Voluntary acceptance of a severance package preceding layoffs

You can read more about the law here: http://portland.bizjournals.com/portland/stories/2009/04/13/story10.html?b=1239595200^1809894&ana=e_vert