News & Updates
COBRA Subsidy Extension and Expansion
Under the American Recovery and Reinvestment Act of 2009 (ARRA), the federal government pays 65 percent of COBRA premiums for up to 9 months for Assistance Eligible Individuals (AEIs) who were involuntarily terminated between September 1, 2008, and December 31, 2009. An extension was signed into law by President Obama on Saturday, December 19, 2009 as part of the Department of Defense Appropriations Act of 2010 (H.R.3326). As a result:
This legislation also allows those Assistance Eligible Individuals who exhausted their full 9-month COBRA subsidy period prior to the date of enactment (i.e. December 19, 2009), and who failed to make a timely premium payment during the transition period, to reinstate coverage upon payment of all applicable premiums within 60 days of the date of the enactment or, if later, 30 days after notice is provided.
Employers will be required to provide notice describing the extension to anyone who was an AEI on or after October 31, 2009 and all individuals who have experienced a COBRA qualifying event of termination of employment (voluntary or involuntary) on or after October 31, 2009.
A letter will be distributed the first week in January to our customers who have our COBRA Individual Billing Administration service. We are also working with Flexible Benefits, our Small Group and Select segments third-party administrator who handles the Aetna COBRA product, on the appropriate communications.
The Department of Labor (DOL) has until January 18, 2010 to provide additional guidance regarding this extension and associated notice requirements. Specifically, the extension includes notice requirements as well as requirements for the handling of late payments and overpayments resulting from individuals who may have already exhausted their nine-month subsidy.
This legislation is applicable to all other continuation programs at the state level which are comparable to COBRA. More information will be communicated as it becomes available.
We will also continue to monitor for any future legislative changes to COBRA which may occur in January as the Senate takes up debate on the "Jobs for Main Street" act (H.R. 2847), which the House of Representative passed last week.
Thank you for your attention to this important legislation.
View the bill.