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Update on the COBRA Subsidy Extension through March 31, 2010

Mar 12, 2010

COBRA Subsidy Extension to March 31, 2010

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 Appropriation 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. 

Aetna will continue to distribute notices to terminated members in carrier directed states and those states whose law requires carriers to provide notice of state continuation and subsidy rights to members. 

To view Aetna's previous updates on ARRA, please visit Producer World.

Aetna will continue to monitor this legislation, which is expected to carry on, and provide updates when available. For more information, please contract your b&p Group Sales Representative.

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