COBRA is the federal program that allows workers to hold onto their health insurance benefits after a job loss. The new law subsidizes 65 percent of COBRA premiums for some workers for up to nine months. News of the subsidy has generated confusion and frustration in addition to a bit of relief.

COBRA coverage typically is available for 18 months but at a steep price; the formerly employed person usually pays 100 percent of the premium plus a 2 percent administrative fee. The unfortunate fact is that this is when the average person is least able to afford the full premium on his/her own. Not only has the person just lost her job but her health insurance premiums typically double under COBRA coverage. That is also why only 10 percent of eligible persons take advantage of COBRA coverage. The coverage is expensive, but it can be an important option for people who may not be able to find new coverage due to preexisting conditions.

There are a few key things to know about the new COBRA subsidy:

- Timing and eligibility. The new federal subsidy will cover 65 percent of premiums for nine months. It’s available only to workers who lose their jobs between Sept. 1, 2008 and Dec. 31, 2009.

- Filing deadlines. Generally, you need to file for COBRA coverage within 60 days of leaving your job. But under the economic stimulus law, if you lost your job but didn’t elect COBRA, you’ll have 60 days to make an election and get the subsidy after you receive a notification from your old employer of the subsidized rates and that you are again eligible.

- The subsidy. If you’re eligible, you’ll pay premiums equal to 35 percent of the total to your former employer’s plan; the plan will receive the difference through reduced payroll taxes that they would have paid to the federal government, or through a refund under certain circumstances. The subsidy is limited to nine months.

- Income caps. The subsidy is only available to individuals with maximum adjusted gross income of $125,000, and $250,000 for married couples filing jointly.

The Salt Lake Tribune published an informational article on the new law’s effect on business. It was also picked up by the AARP Bulletin Today. Diversified’s Diane Malin was quoted in the SL Trib article:

Benefits threatened » Diane Malin, an account executive and human resource specialist at the Diversified Insurance Group, said the federal subsidy penalizes companies for going “above and beyond.”

If the government is offering to pay more than half of a laid-off worker’s COBRA premium, it no longer makes sense for a company to chip in as part of a severance package, she said.

“There’s no incentive for them to do that any longer,” Malin said, “and there’s actually a disincentive if they do.”

Worse yet, about 11 percent of companies surveyed by the Employers Council said they may not be able to continue offering health insurance to their workers at all. A company that doesn’t offer benefits to begin with isn’t obligated to extend enrollment in a group plan via COBRA.

That avenue may become increasingly appealing to the 22.8 percent of companies that indicated in the survey that they’re planning to reduce their work forces in the “near future.”

But, said Engar, “I think most employers want to do the right thing, and for so many of them, having to lay people off has been very, very difficult for them. They want to take care of their people as much as possible.”

For the full article CLICK HERE.

Follow the link below to see and hear a video that introduces the Entrepreneur of the Year to business and economic development leaders of Southern Utah. You will also find applications and additional info about the Ernst & Young Entrepreneur of the Year Program. If you know of a good candidate for the EoY Program, get them to apply soon as the deadline is the 16th of March, 2009.

Follow this link for more info.

So who’s most likely to be a victim?

• People with incomes over $75,000 were more likely to be hit than those with lower earnings.
• By age, the highest fraud rate is among people between 35 and 44.
• Ethnically Hispanics were hit the most followed by African-Americans, Caucasians and Asians.

These results were pulled from research performed by the Javelin Strategy and Research Group.Other worthwhile tidbits include the following ways to avoid identity theft:

Avoiding Identity Theft

* Don’t give out your Social Security number to anyone who calls you unless you do know the caller and were expecting the call.

* Don’t give out any personal identifying information on social networking websites and in chat room discussions. Always be sure to verify the identity of the person asking for the information.

* Keep your sensitive documents secure. A safe deposit box at your bank is your best bet.

* Shred any documents you want to throw out that have your account numbers or other identifying information on them. Shredders today are pretty cheap and a lot cheaper than cleaning up an identity fraud mess.

* Choose hard to guess passwords and pin numbers. Most people use a part of their name or a pet’s name. Be more creative. Also, change up your passwords and pin numbers so you don’t use the same one with several accounts.

“. . . a surprising number of the most powerful and successful corporate lawyers in New York City have almost the exact same biography: they are Jewish men, born in the Bronx or Brooklyn in the mid-1930′s to immigrant parents who worked in the garment industry. Now, you can call that a coincidence. Or you can ask—as I do—what is about being Jewish and being part of the generation born in the Depression and having parents who worked in the garment business that might have something to do with turning someone into a really, really successful lawyer?”

“It’s those who lie outside ordinary experience who have the most to teach us.”

“We’ve been looking at tall trees, and I think we should have been looking at the forest.”

– from an interview of Malcom Gladwell about his new book Outliers

Diversified Insurance Group has a holiday tradition of sending an influential business book to our clients and partners at the end of every year. This year we’ve selected Outliers – The Story of Success by Malcolm Gladwell as our firm’s 2008 Book of the Year.

We have simple criteria when picking our book of the year: 1) it must be published in the given year, and 2) it needs to be both meaningful and enjoyable to read. This year we reviewed 10 books that fit this description and were all worthy of consideration. Outliers stood out, pun intended, because it was the most enjoyable. It is highly entertaining and readable. And given the economic challenges this country is currently facing we thought a little light reading would be appreciated.

Outliers helps us look at success in an entirely different way and explains various factors that contribute to extraordinary performance. Gladwell provides some fascinating and interesting examples to demonstrate his theories by examining the wealthiest people in the history of the world, from Nobel laureates to Junior Hockey All-Stars in Canada. Sharing his anecdotes, lists and conclusions will help enliven any holiday party or dinner conversation.

As a professional service provider, we are constantly working at ways to differentiate our firm and to stand-out from our competition — to be a true outlier in the most positive sense. One of the ways we’ve been able to do this is to associate with highly successful partners and clients. If it is true that you’re known by the company you keep, then we’re well on our way to accomplishing this goal.

We hope you enjoy this book as much as we did. If you get a chance, we’d appreciate your comments on the titles we’ve selected as our books of the year.

- Spence Hoole