COBRA Premium Subsidy Extended
The Department of Defense Appropriations Act of 2010, signed into law by the President on December 19, 2009, extends the 65% COBRA premium subsidy that was created earlier this year in the American Recovery and Reinvestment Act.
The COBRA premium subsidy starts for the first period of coverage beginning after February 16, 2009, and continues until the earliest of these events:
1) the first date that the individual becomes eligible for group health plan coverage or Medicare coverage;
2) the date that the individual ceases to be eligible for COBRA continuation coverage; or,
3) as extended by the new legislation, the date that is fifteen months (formerly nine months) after the first day of the first month after the individual becomes eligible for the premium subsidy.
To be eligible for the COBRA premium subsidy, one must meet the following tests:
1) A covered employee whose coverage under the group health plan ends because of termination (other than gross misconduct) or reduction of hours of employment, or a beneficiary under the group health plan as either the spouse or dependent child of the covered employee;
2) Eligible for COBRA continuation coverage at any time from September 1, 2008 through February 28, 2010 (formerly December 31, 2009)
3) Elects COBRA continuation coverage.
The COBRA continuation payments and the government subsidy will continue to work as they did prior to this extension.
To further discuss the potential implications of this legislation on your specific circumstances, please feel free to call us.