COBRA extension approved: Here’s the fine print
March 5, 2010 by Kerry IsbergPosted in: COBRA, Employment law, Health care, In this week's e-newsletter, Latest News & Views
Here are the details on the recently approved extension of COBRA subsidy program for health coverage.
The COBRA subsidy program was set to expire, but President Obama extended for one month the program enacted under the American Recovery and Reinvestment Act. [HR 4691, The Temporary Extension Act of 2010.]
Under the program, eligible individuals pay 35% of their healthcare premiums, and the feds reimburse the employer for the remaining 65% through a tax credit.
The fine print
So why just one month? Congress wants to extend the program through the end of the year but needs to decide how it’ll enact revenue provisions to pay for certain programs (e.g., COBRA subsidy and unemployment benefits programs). The extension buys legislators another four weeks.
To qualify for the subsidy, people must experience a COBRA-qualifying event – i.e., be involuntarily terminated – between 9/1/08 and 3/31/10. Note that the subsidy’s now also available to those who:
- first lose their coverage because of a reduction in hours between 9/1/08 and 3/31/10, and
- are then involuntarily terminated on or after 3/2/10 but by 3/31/10.
The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.
Right now, the Senate’s debating HR 4213, which would extend the COBRA subsidy program through the end of the year. We’ll keep you posted.
You’ll find updated COBRA info on the Department of Labor’s Web site.
Tags: American Recovery and Reinvestment Act, COBRA, health coverage, HR 4691, obama
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March 9th, 2010 at 7:52 am
When are they just going to make this permanent OR just say through 12/31/2010. They may as well! I think it’s great but would it be too much to ask for a bit more organization. Those who do not use 3rd party administrators will have nightmares for the rest of the year!
March 12th, 2010 at 4:19 pm
I agree with Stacy. Even with a 3rd party administrator, this running around at the 11th hour is ridiculous. Maybe they should poll the people who work with this everyday before they make rash decisions. I back the idea 100%, for those that were termed due to cutbacks and layoffs, but the employees that were termed for cause, should not qualify. They also need to pay attention to some of the provisions. As a former employee that was involuntarily termed, that qualifies for Medicare for ESRD(end stage renal disease) ONLY, the way the law reads now, does not qualify for the subsidy. These folks need this subsidy more so than most. They are facing astronomical bills. But since the law reads that if you qualify for Medicare–period–any part of it, you don’t qualify for the subsidy. I have written to all my reps and congressmen here in my state and even emailed the president himself, and no action has been taken.