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COBRA extension approved: Here's the fine print

Kerry Fitzgerald
by Kerry Fitzgerald
March 5, 2010
1 minute read
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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.

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