← Back to News & Updates
COBRA Subsidies Reaching End for First Wave of AEIs
Dec 08, 2009
The first wave of participants eligible for COBRA and state continuation subsidies are reaching the end of their nine-month subsidy period
The American Recovery and Reinvestment Act provided eligible COBRA and state continuation participants with nine months of subsidized premiums. Participants who became eligible in this first wave on March 1, 2009, received a 65 percent premium subsidy through November 30, 2009. They will be responsible for paying 100% of the premiums beginning in December 2009. For example, if a participant's subsidized premium was $105 in November 2009, that premium will increase to $300 for December 2009. This is a significant increase and may be unexpected for some participants who may have lost track of the nine-month end date.
Subsequent waves of the nine-month subsidy period will expire monthly hereafter. For example, the subsidy will expire on December 31, 2009, for COBRA and state continuation participants who became eligible on April 1, 2009. It will expire on January 31, 2010, for participants who became eligible on May 1, 2009, and so on.
Employers and group administrators may experience:
- an increase in calls from impacted participants, many expressing concern with their ability to pay the increased premiums.
- a possible increase in member terminations due to non-payment of increased premiums.
COBRA employers currently receiving federal subsidy reports will continue to receive those reports as long as they have participants receiving the subsidy.
The subsidy program will end on December 31, 2009, for any new COBRA or state continuation applicants. Assuming there is no extension, the final wave of the nine-month subsidy period will end on September 30, 2010.
The government is currently considering an extension of the subsidy beyond the program's December 31, 2009, end date. Anthem Blue Cross is monitoring this possibility. If there are any changes or an extension to the subsidy law, Anthem will communicate that as soon as possible.
Please contact your Beere & Purves Group Representative with any questions.