COBRA Subsidy Law Extended

A Notice From Your Broker
Issue Date:  April 22, 2010

This issue includes the following topics:

• COBRA Subsidy Law Extended and Expanded
• Other important facts

COBRA Subsidy Law Extended

On April 15, 2010, Congress passed and the President later signed the Continuing Extension Act of 2010 (the "Act") that extended to May 31, 2010 the eligibility for the 65% premium subsidy for COBRA premiums for individuals that incur an involuntary termination of employment on or before that date. Prior to this Act, the eligibility time period for the COBRA premium subsidy expired on March 31, 2010. This Act modifies the American Recovery and Reinvestment Act of 2009 (ARRA), which was amended by the Temporary Extension Act of 2010 earlier this year. 

 The following are actions that you may need to take:

• Modify your current COBRA notification letter to include the requisite ARRA subsidy language for each individual that incurs a Qualifying Event on or before May 31, 2010.
• Send letters to re-notify individuals who incurred a Qualifying Event on or after April 1, 2010, and whose COBRA Election Notice was printed after April 1, 2010 as that notice did not incorporate the COBRA premium subsidy offer. 

The Act does not change the maximum length of the subsidy which remains at 15 months, as long as the Assistance Eligible Individual remains eligible.

Other important facts

• The other terms and conditions of the initial COBRA subsidy will continue to apply.
• The law DOES NOT increase the COBRA period beyond the original 18 months.

As additional information becomes available, we will continue to send updates on the COBRA provisions in the American Recovery and Reinvestment Act.  As always, feel free to contact us if you have any questions or immediate needs.