According to a news statement issued by the U.S. Department of Labor on December 21, 2009, the program that offers insurance premium reductions to certain employees that were involuntarily terminated and their dependents (collectively known as assistance eligible individuals or AEIs) has been extended. The extension, which amends the American Recovery and Reinvestment Act of 2009 (ARRA), relates to the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the 65 percent premium reduction that it offers to AEIs.
There are a few key points that employers need to be aware of:- The eligibility period for the program for AEIs is now extended for an additional two months; from December 31, 2009 to February 28, 2010. Originally, only employees who were involuntarily terminated between September 1, 2008 and December 31, 2009 and their qualifying dependents were eligible for the subsidy.
- COBRA premium subsidy payments have been extended for an additional six months. Originally, AEIs were only able to receive the 65 percent premium reduction for nine months, but this has now been extended to 15 months.
- AEIs who had reached the end of their premium reduction period will have until February 17, 2010, or 30 days after notice of the extension is provided, whichever is later, to pay the 35 percent reduced premium amount for each payment not made during their transition period.
- AEIs who paid full premiums after the subsidy expired for them are entitled to reimbursement (or ARRA approved credit), minus the 35 percent reduced premium amount required for continuing coverage.
- Employers must provide notices of the new extension rights by February 17, to individuals who became AEIs between October 31, 2009 and December 21, 2009, or experienced a qualifying event "consisting of termination of employment" relating to COBRA coverage on or after October 31, 2009. For cases of qualifying events occurring after 12/21/2009, the general timing of COBRA notice requirements apply. Notices are also required for individuals who stopped paying for coverage because they could no longer afford it; explaining that they are now eligible to reinstate their coverage retroactively.