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Congress Extends COBRA Subsidies Again

March, 10 2010

Update: Since posting the article below, the Department of Labor has updated the model notices to include information about the Temporary Extension Act of 2010. You may access our coverage of the new notices by clicking here.

Congress has extended COBRA subsidies for workers involuntarily terminated from their jobs for a second time since enacting the American Recovery and Reinvestment Act of 2009 (ARRA), popularly known as the “Stimulus Bill.” ARRA provided for subsidies for premiums paid for health benefits under COBRA. For more information about the subsidies, please click here.

Subsidies were previously extended by the 2010 Defense Appropriations Act, which extended the end of the eligibility period for COBRA subsidies from December 31, 2009 to February 28, 2010 and extended the maximum subsidy period from nine months to 15 months. (To view our coverage of the previous extension, please click here.)

The current extension was signed into law as the Temporary Extension Act of 2010 on March 2, 2010. That law extends the eligibility period of COBRA subsidies available to employees under the ARRA from February 28, 2010 to March 31, 2010. The law also provides that any employee or covered dependent who lost health coverage due to a reduction in hours occurring on or after September 1, 2008, and who is terminated between March 2, 2010 and March 31, 2010 is also considered eligible for assistance, even if the individual did not elect COBRA previously or let it lapse. Under current law, however, the subsidy would only last until March 31, 2010.

The Department of Labor has yet to issue new model notices following this most recent extension of the eligibility period. The model notices linked to and explained in our previous article should continue to be sent to eligible employees, but should be modified to reflect the most recent extension of the eligibility period. (Update: New notices have now been issued by DOL and should be used. The notices are available by clicking here.)

If you have any questions about your organizations obligations under COBRA or the COBRA subsidy laws, please contact your employment counsel or contact us.

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