President Obama has signed the Fiscal Year 2010 Defense Appropriations Act. The act includes a provision that will extend eligibility for the COBRA subsidy until February 28, 2010 and extend the duration of the subsidy to 15 months. Plan sponsors will be required to send notices to anyone who has become eligible for the subsidy since October 31 and may have to provide transition periods so that individuals can make retroactive premium payments to have their COBRA coverage reinstated. More specifically, the act will:
Extend eligibility for the COBRA subsidy. Under ARRA, individuals have been eligible for the subsidy if they are eligible for COBRA between September 1, 2008 and the December 31, 2009 due to an involuntary termination of employment that occurred during the September 1, 2008 to December 31, 2009 period. Under the new act, eligibility for the subsidy will be extended to those who experience a qualifying event as a result of involuntary termination of employment by February 28, 2010. Note that in addition to extending eligibility to those who lose their jobs involuntary by February 28, the act provides that eligibility for the subsidy is tied to the date of the qualifying event rather than the date on which the individual was first eligible for COBRA.
Extend the duration of the subsidy. ARRA provided 9 months of premium assistance. The new act will extend the premium assistance period to 15 months. The extended period applies to those who have received the subsidy already as well as those who may become eligible under the extended eligibility period. Individuals who were eligible for the COBRA subsidy upon enactment of ARRA and have already exhausted their 9 months of premium assistance will receive a transition period so that they can pay premiums to have their coverage reinstated. In general, an individual will be treated as having timely paid premiums if the individual had COBRA coverage immediately before the transition period and paid the required premium within 60 days of enactment (or, if later, 30 days after receiving notice about the individual’s right to pay the premiums and have the coverage reinstated). They will be eligible for a total of 15 months of subsidized coverage. In addition, individuals who paid full COBRA premiums during the transition period would be eligible for a refund or premium credit.
Establish notice requirements. Plan sponsors or administrators must provide notices to individuals who are eligible for the subsidy at any time on or after October 31, 2009 and individuals who experience a qualifying event consisting of an involuntary termination of employment on or after October 31, 2009. The notices will inform them of the provisions of the act. The notices must be provided within 60 days of enactment in the case of qualifying events that occurred before enactment and must be provided consistent with the requirements of ARRA for qualifying events that occur after the date of enactment. In the case of individuals who failed to pay premiums on a timely basis or paid the full COBRA premium during the transition period, an additional notice must be provided within the first 60 days of the transition period that includes information about the right to make retroactive premium payments or receive a refund or premium credit.
The provisions will take effect as if they had been included in ARRA when it was enacted on February 17, 2009.
Phyllis C. Borzi, Assistant Secretary of the Employee Benefits Security Administration (EBSA) today advised that their COBRA Web site, www.dol.gov/cobra, will have information on new notice requirements, updated guidance, fact sheets, and frequently asked questions as they become available.
Extend eligibility for the COBRA subsidy. Under ARRA, individuals have been eligible for the subsidy if they are eligible for COBRA between September 1, 2008 and the December 31, 2009 due to an involuntary termination of employment that occurred during the September 1, 2008 to December 31, 2009 period. Under the new act, eligibility for the subsidy will be extended to those who experience a qualifying event as a result of involuntary termination of employment by February 28, 2010. Note that in addition to extending eligibility to those who lose their jobs involuntary by February 28, the act provides that eligibility for the subsidy is tied to the date of the qualifying event rather than the date on which the individual was first eligible for COBRA.
Extend the duration of the subsidy. ARRA provided 9 months of premium assistance. The new act will extend the premium assistance period to 15 months. The extended period applies to those who have received the subsidy already as well as those who may become eligible under the extended eligibility period. Individuals who were eligible for the COBRA subsidy upon enactment of ARRA and have already exhausted their 9 months of premium assistance will receive a transition period so that they can pay premiums to have their coverage reinstated. In general, an individual will be treated as having timely paid premiums if the individual had COBRA coverage immediately before the transition period and paid the required premium within 60 days of enactment (or, if later, 30 days after receiving notice about the individual’s right to pay the premiums and have the coverage reinstated). They will be eligible for a total of 15 months of subsidized coverage. In addition, individuals who paid full COBRA premiums during the transition period would be eligible for a refund or premium credit.
Establish notice requirements. Plan sponsors or administrators must provide notices to individuals who are eligible for the subsidy at any time on or after October 31, 2009 and individuals who experience a qualifying event consisting of an involuntary termination of employment on or after October 31, 2009. The notices will inform them of the provisions of the act. The notices must be provided within 60 days of enactment in the case of qualifying events that occurred before enactment and must be provided consistent with the requirements of ARRA for qualifying events that occur after the date of enactment. In the case of individuals who failed to pay premiums on a timely basis or paid the full COBRA premium during the transition period, an additional notice must be provided within the first 60 days of the transition period that includes information about the right to make retroactive premium payments or receive a refund or premium credit.
The provisions will take effect as if they had been included in ARRA when it was enacted on February 17, 2009.
Phyllis C. Borzi, Assistant Secretary of the Employee Benefits Security Administration (EBSA) today advised that their COBRA Web site, www.dol.gov/cobra, will have information on new notice requirements, updated guidance, fact sheets, and frequently asked questions as they become available.
RSS Feed