Obama signs COBRA subsidy extension: Key changes
December 23, 2009 by Christian SchappelPosted in: COBRA, Employment law, Health care, Money, Pay and benefits, Special Report - Benefits
President Obama just signed a bill extending the federal COBRA subsidy by six months. It goes into effect immediately.
The nine-month, 65% premium subsidy has been extended to a total of 15 months.
Plus, the subsidy is available to employees or dependents who lose coverage under a group health plan (as the result of an employee’s involuntary termination of employment) through Feb. 28, 2010 — changed from Dec. 31, 2009.
The legislation also provides an additional six months of subsidized coverage for those whose initial nine-month subsidy has run out.
And beneficiaries whose subsidy ran out, and who didn’t pay the full premium, even have a second chance to opt for coverage.
Example: Employees whose subsidy period ran out Nov. 30 — and who couldn’t come up with the full insurance premium for December — can pony up their 35% share in January and get retroactive coverage for December.
Tags: bill, COBRA, COBRA subsidy, House, involuntary termination, legislation, Senate
December 25th, 2009 at 6:00 pm
Are COBRA Benefits available for people who voluntarily leave there benefit plan employers also?
December 28th, 2009 at 8:58 am
I hope this is helpful!
December 28th, 2009 at 9:16 am
Yes, if you voluntarily resign or are terminated for anything other than “gross misconduct” you can generally elect COBRA, however, you will shoulder the entire cost. There is no employer or government subsidy.
December 28th, 2009 at 9:21 am
Terry, COBRA Benefits ARE available to people who voluntariliy leave employment but those people are NOT eligible for the 65% premium subsidy so they pay the full amount (actually up to 102%) of the monthly premium of their plan (employee portion, employer portion, and up to a 2% administrative fee).
December 28th, 2009 at 9:50 am
Does anyone know if the DOL will provide a sample letter or wording for the notification requirements? i.e notifiying employees whose nine months of subsidy ended November 30? Just like the gov to pass this in such an untimely manner. I anticipate an administrative nightmare with my insurance carrier in allowing the extension of the employees’ grace period to pay the reduced premium.
December 28th, 2009 at 10:42 am
The DOL is expected to provide a sample notice letter at http://www.dol.gov/ebsa/COBRAmodelnotice.html
December 28th, 2009 at 10:47 am
Does anyone know if Michigan has any mini cobra coverage or if they plan to enact it??
December 28th, 2009 at 2:12 pm
Thanks for the link, Christian.
This is such good news for our employees who have been laid off. The additional work is a small price to pay for this additional support for our unemployed.
December 28th, 2009 at 4:40 pm
If you exhaust medical leave and all paid time off but are unable to return to work, can you take advantage of the the COBRA subsidy if you choose to retire versus be terminated?
December 30th, 2009 at 9:05 am
I read somewhere and need to know if this is true – if you have a severeance agreement or pay you can not get the subidy COBRA and your not entitled to COBRA – am I wrong? We have an individual that got a severeance package when she left and within that packet it was agreed upon for us to keep her on our health coverage for 9 months and that we would pay for it (which ends the end of Feb). Is she entitled to COBRA after this agreement?
December 31st, 2009 at 12:12 pm
Kim,
Your employees that have a severance package can get the subsidized COBRA just like anyone else. All of our employees got a severance package and all where still eligible. As long as she met the other requirements (term date/coverage loss) then she will be able to sign up.
January 13th, 2010 at 1:49 pm
The following are the requirements that must be met to be considered an “Assistance Eligible Individual” for reduced premiums:
* Must be eligile for continuation coverage at any time during the period from September 1, 2008 – February 28, 2010 and elect the coverage;
* Muse have a continuation coverage election opportunity related to an involuntary termination of employment that occurred at some time from September 1, 2008 – February 28, 2010;
* Must Not be eligible for Medicare; AND
* Must Not be eligible for coverage under any other group health plan, such as a plan sponsored by a successor employer or a spouse’s employer.
Hope that helps some.
January 26th, 2010 at 9:54 am
My 18 months of cobra coverage will end in March. Will I be eligible to extend my cobra benefits beyond the 18 months under the subsidy extension?
February 9th, 2010 at 10:51 am
President Obama wants health insurance for all. While Cobra provides a temporary solution to those who unfortunately lost their jobs; why not not make it permanent? On the same note, why not continue some sort of Government supplement as well? Billions of dollars have been spent bailing out AIG, GM and many other institutions while a huge $1.7 billion dividend is being paid to private equity investors of a health care provider! In addition, health care cost are (currently)not a taxable benefit to employees and a write off for employers while unemployed folks receive no tax benefit.
In addition, as we all know, health care cost are out of control for a number of reasons. If President Obama and Congress are serious about health care for all, the above would be a step in the right direction. At the same time, perhaps Congress should consider opening up the AMA to allow more Doctors, and have a task force monitor abusive fee structures and waste within the industry.