What is the difference between a Grace Period and Run Out Period?

09/19/2011

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Don't miss out leaving election dollars in a cafeteria by knowing the difference between grace period and run out period.

A grace period is the # of days a member can still have a service after a plan year ends and be reimbursed.

Run out period is the # of days to turn in expenses for reimbursement. No new services are allowed.

Every plan is different, so check with your administrator.
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Main Benefit to Cafeteria Plan: Pre-Tax Savings!

09/19/2011

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The main benefits to a cafeteria plan is the pre-tax savings. This means money elected to be ran through on a pre-tax basis avoids paying federal and state taxes. This is most know to apply to premium only plans (for insurance products), flexible spending and dependent care plans...but there are others as well.
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6 FAQs about end of COBRA Subsidy

09/19/2011

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The subsidies, enacted under the American Recovery and Reinvestment Act (ARRA), were given to eligible unemployed workers laid off between September 2008 and May 2010. [DOL has offered a full fact sheet on the COBRA Premium Reduction]

Though Congress had passed several extensions for the premium assistance program, legislation to extend eligibility to workers laid off beyond May 31, 2010 was proposed, but never passed.

Those who elect COBRA continuation coverage typically are offered coverage for 18 months. Since the subsidies covered 15 months of premiums, those who were laid off in May 2010 (the last segment of unemployed eligible for premium assistance) and who still have COBRA face at least three months paying the full cost of coverage beginning in September. According to the Kaiser Family Foundation, COBRA coverage without a subsidy is almost three times the cost at $1,137 for a family policy and $410 for an individual, versus $398 and $144 respectively.

In light of the subsidies coming to an end, The Department of Labor updated Tuesday its COBRA ARRA Web page with six FAQs:
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