President Signs COBRA Subsidy Extension Legislation into Law

December 22, 2009 - by: HR Hero 19 COMMENTS

President Barack Obama signed legislation into law today that would extend the original federal COBRA subsidy created by the American Recovery and Reinvestment Act of 2009.

The legislation was part of the Department of Defense Appropriations Act, 2010 (H.R. 3326), a bill that appropriates funds for the Department of Defense. The bill passed the U.S. House of Representatives by a 395-34 vote and the U.S. Senate by an 88-10 vote last week. The legislation extends:

  • the total allowable time an individual could receive the COBRA subsidy by six months (from nine to 15 months); and
  • the subsidy to individuals who are involuntarily terminated between January 1, 2010, and February 28, 2010.

Additionally, the legislation would allow individuals whose subsidy periods already expired and who failed to pay their full unsubsidized premiums to retroactively pay them.

Employers will need to quickly revise previous documents and prepare new paperwork to meet the requirements of the new subsidy extension legislation. Among other things, employers will have to amend their current COBRA subsidy paperwork to reflect:

  • the extra six months of coverage;
  • the new February cut-off date to qualify for the subsidy; and
  • the fact that individuals’ eligibility for the subsidy is conditioned only on the date of their involuntary employment termination (instead of the date of their employment termination and the date their COBRA coverage period begins).

Employers will also need to include the above information in their standard COBRA package from this point on.

Additionally, employers will have to develop a notice to provide to current and future COBRA beneficiaries that details the premium subsidy extension created by the new legislation. They will also have to provide additional notice to certain individuals whose subsidy periods expired and who failed to pay their full unsubsidized premiums. Such notice should inform applicable individuals about the new legislation and that they can make retroactive premium payments in order to maintain their COBRA coverage.

The House also recently passed a major appropriations bill with a provision that would extend the COBRA premium subsidy to individuals who are involuntarily terminated through June 30, 2010. However, the Senate is not expected to act on this legislation until next year.

Also, you can keep up with the latest legal changes affecting employer benefits and trends in employee benefits with the Benefits Complete Compliance

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19 COMMENTS

1 Nancy
03:29:24, 22/12/09

My prayers have been answered at least for 6 more months…Thanks

2 Judi
04:08:21, 22/12/09

Does anyone know if the president has sign this bill so we will not have to pd the higher cobra payment this december, by the 31st? And if not sign anyone know when it will be sign? If you know please post and location we could find this info on. Thanks so much!!!

3 Roxane
04:50:36, 22/12/09

Praise God!! This is fantastic news! Thank you for the latest update. I just received my insurance renewal forms for 2010 in the mail today and was extremely bummed to see that my premium would be increasing by sixty dollars more per month. I didn’t know what I was going to do and was feeling pretty hopeless until I read this email from HR News. Thank you for keeping us well informed. Keep up the good work!

4 Twitter Trackbacks for President Signs COBRA Subsidy Extension Legislation into Law | Human Resources News [blogs.hrhero.com] on Topsy.com
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[...] President Signs COBRA Subsidy Extension Legislation into Law | Human Resources News blogs.hrhero.com/hrnews/2009/12/22/president-signs-cobra-subsidy-extension-legislation-into-law – view page – cached President Barack Obama signed legislation into law today that would extend the original federal COBRA subsidy created by the American Recovery and Reinvestment Act of 2009. [...]

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[...] President Signs COBRA Subsidy Extension Legislation into Law | Human Resources News employmentlawpost.com/hrnews/2009/12/22/president-signs-cobra-subsidy-extension-legislation-into-law – view page – cached President Barack Obama signed legislation into law today that would extend the original federal COBRA subsidy created by the American Recovery and Reinvestment Act of 2009. [...]

6 uberVU - social comments
13:14:42, 22/12/09

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7 Susan
15:04:59, 22/12/09

I just called my company who does our cobra and the guy has no idea when this law will take affect..can someone let me know? I owe my first big payment in January (we just wrapped up our 9 months) and I don’t want to pay if I don’t have to..the guy was clueless. I tried to call the number on the dept. of labor website 866-444-3272 and it is not in service?

8 RWS
18:32:29, 22/12/09

Susan,
I had the same answers from cobra, but they also said the premiums that need to be paid in full ( Dec 09 for me ) I will receive a refund for the subsidy difference or I can use the overpayment for the next few months. I am sure that the cobra rep has been preparing for this and if they get moving, we should receive new reduced rate coupons for Jan 2010. They give a 30 day grace period so Jan wont be due until the end of the month. Otherwise we will all have to pay that in full and hope the refunds are prompt. I need to check on the subsidy, I know it is a least 65% but the was a 75% proposed when the bill was presented a few months ago. Anyone know?

9 John
19:37:32, 22/12/09

I just got off the phone with my COBRA person. He was literally reading this online while we were on the phone. The information I got was that the reduction would remain at 65% but the length of time has been extended to 15 months.

10 Jon Barrie
19:57:51, 22/12/09

A Question: I went onto COBRA benefits Sept 1, 2008 and the 65% subsidy ended November 30, 2009. Does the legislation just passed (to extend the COBRA subsidy to a total of 15 months) also have the effect of extending the 18 month COBRA period? Am I know covered by subsidized COBRA through May 31 (a total of 20 months) or does my COBRA end March 31 (the 18 month applicable up to now) ???

Any assistance/guidance you can provide will be greatly appreciated.

11 JJ2009
16:02:16, 23/12/09

This is great news….the company that administors my Cobra said I would have to pay in full, and the overage would be credited back to my account. I paid in full for December and January…so it looks like I’m covered for a few months now without having to make any additional payments. If I get back to work and have coverage from my new employer, the credit will be refunded to me then.

12 Small Business Owner
19:16:28, 23/12/09

Not such good news for very small business owners. I now pay more in in the 65% Subsidy than I do in payroll taxes for my remaining employees. I have to pay it monthly, but only get reimbursed quarterly. Now I no longer am a Cobra employer for 2010 because we lost 90% of company in 2009, but I still have to pay. Takes a big bite out of cash flow.

13 Wendy Marmo
21:12:08, 23/12/09

This is GREAT! But what about those of us on State Cobra programs? My subsidy expired on 11/30. I’m on CalCobra and they said the subsidy extension doesn’t apply to me!

14 mac
01:09:21, 29/12/09

Cobra cannot charge you the full premium for Dec. the bill signed into law is retroactive to December 1. It also allows you to make the December payment in January if you need to so no one can be cancelled for failure to make a payment in December…

15 Susan
20:25:13, 31/12/09

when does the law take affect? my rates have not dropped for january yet…just checked and the csr’s I called are clueless

16 Jerry
21:39:57, 05/01/10

This is fantastic news but does anyone know if the President is planning to extend Cobra longer than 18 months? This would help a lot of unemployed because our health care costs will double when we have to go to a private plan.

17 Ram
00:02:16, 14/01/10

I spoke to customer service today at Anthem, I also have CAL-Cobra and they informed me that they have not received any paperwork from the state yet so until they do I have to pay the full amount, I explained to her that I paid it in Dec-09 and that I should be getting credit for Jan and Feb, she suggested I keep checking in since my premium is not due until end of month.

18 Ci Anne
10:41:18, 05/02/10

I’m still confused. My nine month COBRA subsidy period ended with my November payment.I have paid the full premium to my employer in December and January and am now preparing to make another full payment for February–which I can ill afford. Should I have been informed already of the change and should I be paying less now? Is this happening to others?

19 Susan R
09:01:20, 22/04/10

When will the President sign the new COBRA extension? My husband was laid off in April, 2010. What are the exact dates now?

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