Since the enactment of the American Recovery and Reinvestment Act of 2009, the original law that offered a 65 percent premium subsidy to help certain individuals pay for continuing health coverage (also known as COBRA), the eligibility period and qualifications required for individuals to receive the subsidy have been extended several times and will likely be extended again.
Earlier in the year, Congress extended the subsidy eligibility period to March 31, 2010, but then recessed before extending it further, causing many individuals who were involuntarily terminated after that date to lose health coverage for themselves and their qualifying dependents, or pay the full COBRA premium. On April 15, Congress passed the Continuing Extension Act of 2010, which extended the COBRA subsidy eligibility period to May 31. Because of the gap between March 31 and the April 15 enactment date, eligibility is extended retroactively so that individuals involuntarily terminated after March 31, 2010, but before April 15 are now eligible to receive the 15-month subsidy. The announcement of the extension came shortly after Congress's decision to allow individuals who had a reduction in hours on or after September 1, 2008, followed by an involuntary termination of employment between March 2, 2010 and March 31, 2010, to take advantage of the premium subsidy. Originally, individuals who had elected COBRA due to a reduction in hours were not permitted to take advantage of the subsidy. As a result, employers are expected to notify qualifying individuals and their dependents of their new or extended eligibility status and model notices have been made available.
The U.S. Department of Labor has made available a Fact Sheet with guidelines for employers. For additional information and questions regarding COBRA and the premium subsidy, contact the Employee Benefits Security Administration at 1-866-444-3272.
- Industry Priorities
- Education
- News
- Connect
- Benefits
- Events
- Shop