Litigation

COBRA Subsidy Extended

By John Walch

Today the President signed an extension to the COBRA subsidy (see pages 64-65 regarding section 1010) previously approved by Congress in a rare Saturday session.  The new law extends the eligibility period for the COBRA premium subsidy for an additional two months (through Feb. 28, 2010) and the maximum period for receiving the subsidy for an additional six months (from nine to 15 months).  One immediate effect is to provide eligibility for December terminations that cause a loss of health plan coverage on January 1, which under the previous statute were not eligible for the subsidy. 

Subsidy recipients who had reached the end of the subsidy period before the legislation extended it to 15 months will have additional time to pay the reduced premiums related to the extension.  To continue their coverage they must pay the 35% of premium costs by February 19, 2010 or, if later, 30 days after notice of the extension is provided by the plan administrator.

COBRA Administrators now have some immediate tasks:

(1) For December terminations, provide a new subsidy notice that incorporates the new provisions.

(2) For COBRA beneficiaries that lost subsidy eligibility at the end of November, provide information regarding the extension of the subsidy period through June 30, 2010 (subject to earlier termination for loss of COBRA eligibility).

(3) Update COBRA subsidy Notice forms to reflect the extensions of the eligibility period and the subsidy period for use with future terminated employees.

Full post as published by Northwest Business Litigation Blog on December 21, 2009 (boomark / email).