COBRA Subsidy Extended

On December 19, 2009, president Obama signed into law the Fiscal Year 2010 Department of Defense (DOD) Appropriations Act. The 2010 DOD Act, among many other things, extended and expanded the COBRA subsidy program originally begun under the American Recovery and Reinvestment Act of 2009 (also known as the "Stimulus Bill").

Under the 2010 DOD Act, the Stimulus Bill's original COBRA premium subsidy period was expanded from nine to fifteen months - six additional months of subsidized coverage. The eligibility cutoff date for the subsidy also was extended from December 31, 2009 to February 28, 2010. (It is certainly possible that additional extensions may follow before this new deadline passes.)

The 2010 DOD Act also put in place a new sixty day retroactive period for payment of premiums for eligible employees and dependents whose subsidy period expired on November 30, 2009.

Lastly, the new law requires yet another special notice outlining these changes to all eligible individuals either on COBRA as of October 31, 2009, or who are terminated from employment with health insurance benefits after that date and up to February 28, 2010. We anticipate that the Department of Labor will issue a form notice in the coming weeks.

Posted by Thamer E. "Chip" Temple III