President Signs Extension, Expansion of COBRA Subsidy Program

Posted by Sandy Reynolds on Mar 4, 2010 8:59:00 AM

President Obama on Tuesday signed the Temporary Extension Act of 2010 (H.R. 4691), extending for a second time the COBRA subsidy created by the American Recovery and Reinvestment Act (ARRA) of 2009.

Individuals who lose health insurance coverage due to an involuntary termination occurring between March 1 and March 31, 2010 are now potentially eligible for the 65 percent federal subsidy of COBRA premiums.

Employers should continue to use their ARRA-compliant COBRA and mini-COBRA notices for all qualifying events occurring during the month of March, with references to "February 28, 2010" changed to "March 31, 2010."
In a significant development, the Act also expands the COBRA assistance program by amending the ARRA definition of Assistance Eligible Individual to include employees who first lost coverage due to a reduction in hours, and who were subsequently terminated involuntarily.

AIM will provide additional information and guidance following a review of the new statutory language. It does appear that employers covered by COBRA (20 or more employees) will be required to notify individuals affected by this program expansion and to provide a new/special election period.

AIM members should contact our HR Hotline with urgent questions - 800.470.6277.  Updates will be posted on this blog.

Topics: Associated Industries of Massachusetts, AIM, Employment Law, Human Resources, COBRA Subsidy

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