COBRA Subsidy Program Extended

The COBRA premium subsidy program, passed last February as part of the American Recovery and Reinvestment Act of 2009 (ARRA) to temporarily assist terminated employees continue employer health benefits, was extended by Congress and signed into law by President Obama.

The new legislation extends the eligibility window to those involuntarily terminated through February 28, 2010, and extends the period of the subsidy from nine to fifteen months.

Previously, employees electing COBRA had to pay up to 102% of the premium cost. But effective March 1, 2009, ARRA provided a subsidy to involuntarily terminated employees equal to 65% of the premiums for up to nine months. This new legislation extends the nine-month period of the subsidy to fifteen months. In addition, this new legislation provides a retroactive period of 60 days (commences upon enactment) for payment of premiums for eligible individuals whose subsidy period expired on November 30, 2009.

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