COBRA Subsidy Extended Again, Now Through May 2010
April 20, 2010
As part of the February 2009 stimulus package, the federal government offered certain benefits to the recently unemployed. Now, for the third time, the federal government has extended a number of those benefits, including the federal COBRA subsidy. On April 15, 2010, President Obama signed into law the Continuing Extension Act of 2010 (the “Act”), which among other things, extends the 65%, 15-month subsidy to COBRA coverage for workers involuntarily terminated between April 1 and May 31, 2010.
Eligibility for the COBRA subsidy as defined in the government’s March 2010 extension legislation continues to apply. Under that definition, individuals who lose group health coverage due to involuntary termination or a reduction of hours followed by an involuntary termination of employment between September 1, 2008 and May 31, 2010, are eligible. Also, individuals who prior to the passage of the Act were offered COBRA coverage on the basis of a reduction in hours but did not elect it, can still be eligible for the subsidy if they are involuntarily terminated before May 31, 2010. The period of COBRA continuation coverage for such individuals will be determined as though the reduction in hours was the qualifying event.
Notification requirements, calculation of benefits cutoff dates, forms of enforcement, and methods by which employers can help recently unemployed individuals qualify for the subsidy are described in this past Franczek Radelet newsletter. Congress continues to consider additional extensions of the COBRA subsidy. Franczek Radelet will keep you informed of developments as they occur.