While the American Recovery and Reinvestment Act of 2009 (ARRA) that provided a subsidy for COBRA premiums was intended to be a short term fix, the protracted downturn in the economy prompted lawmakers to extend these benefits.  On December 19, 2009, President Obama signed into law an extension of the COBRA premium subsidy law that was scheduled to end on December 31, 2009. 

Key aspects of the new law are as follows:

1. Assistance Eligible Individuals (AEI’s) may now receive the subsidy for up to 15 months, up from the nine months allowed under the initial ARRA law.

2. The eligibility period was extended from December 31, 2009, to February 28, 2010.  Additionally, the new law does not require that the COBRA coverage commence prior to February 28, 2010.  Instead, as long as the qualifying event occurs prior to February 28, 2010,  (i.e., involuntary termination of employment) and the individual is entitled to COBRA, then the subsidy would apply.

3. For any AEI for whom the subsidy extension applies, there is a transition period consisting of any period of coverage that begins before the extension’s enactment date. Plan administrators must provide all AEI’s notice of their rights under this extension and provide credits for any months during the transition period when the AEI’s may have paid the full premium.

For more information on the COBRA subsidy or any other benefit issue, please contact us at http://www.ttspro.com/contact-tts  or call us at 1-800-836-9678, x-13.