Gretchen Harders Quoted in “4 Takeaways from New COBRA Subsidy Guidance”

Law360

Gretchen Harders, Member of the Firm in the Employee Benefits practice, in the firm’s New York office, was quoted in Law360, in “4 Takeaways from New COBRA Subsidy Guidance,” by Emily Brill. (Read the full version – subscription required.)

Following is an excerpt:

New guidance from the Internal Revenue Service attempts to clarify which ex-employees who have recently lost their job-provided benefits qualify for six months of free health care under COBRA, tackling questions that left employers scratching their heads after the Biden administration made the coverage available. Here, attorneys tell Law360 their most notable takeaways from the guidance. …

Help in Defining "Involuntary"

One of employers' key questions after the subsidies' release was how to determine whether employees lost their job-provided insurance by choice or against their will. This was important, because the subsidies are only available to those who lost insurance involuntarily — through a layoff, firing, furlough or involuntary reduction in hours. …

One such scenario asks whether people who were forced to resign from their jobs, such as workers who were required to move cities but couldn't do it, qualify for the subsidies. The guidance says that yes, they do, likening such situations to "constructive discharges," which occur when employees resign due to intolerable working conditions.

"If there's a constructive termination, they will be eligible. If someone resigns, they will not be eligible. But if they resign and it's considered a constructive termination, then they are eligible," said Gretchen Harders, a member of Epstein Becker & Green PC's employee benefits and executive compensation group.