Since February 2009, Congress extended the COBRA subsidy to unemployed workers four times.

The last extension – The Continuing Extension Act of 2010 (CEA) – amended ARRA to further extend the period to qualify for the COBRA premium reduction until May 31, 2010.

The latest effort for any continued COBRA extensions stalled before the Memorial Day recess. While Congress may consider extending the government subsidy, there is no immediate news indicating this is the case.

For now, 5/31/10 was the last date of termination from employment for which individuals may be eligible for the federal subsidy.
Additionally, 5/31/10 is 15 months following the 3/1/09 start date of eligibility for the first group of people who were covered under this initial COBRA subsidy program.
The 15-month federal subsidy has ended for individuals who began their COBRA subsidy following termination on 3/31/09.

If you have employees who need to change to less expensive individual plans, they can run proposals for them right from our website under “Individual Insurance Services”.

The Temporary Extension Act of 2010 (the Act) was signed into law by President Obama on Tuesday, March 2, 2010. The Act extends the COBRA subsidy eligibility period originally introduced under the American Recovery and Reinvestment Act of 2009 (ARRA), as amended by the Department of Defense Appropriations Act, 2010, until March 31, 2010.

New Rules
Individuals who experienced a qualifying event that was a reduction in hours of employment, on or after September 1, 2008, and who later experienced an involuntary termination of employment as defined by ARRA between March 2 and March 31, 2010, are eligible for the subsidy if they are otherwise an Assistance Eligible Individual (AEI). This new rule only applies to periods of coverage beginning after March 2, 2010.

New Election Period
Individuals who experienced a qualifying event due to a reduction in hours of employment and did not elect COBRA coverage, or elected and then lost COBRA coverage, are entitled to a new COBRA election period if they later experience an involuntary termination of employment between March 2, 2010 and March 31, 2010.

Civil Action and Penalties
To enforce the provisions of ARRA and the Act, the Treasury and/or Department of Labor (DOL) or an affected individual may bring a civil action to enforce any determinations and/or appropriate relief. Plan sponsor or health carrier failure to comply with Treasury or DOL determinations within 10 days after receiving notice of the determination could result in $110 a day penalty.