COBRA SUBSIDY EXTENDED AGAIN—UNTIL MARCH 31, 2010

The 65% Federal COBRA subsidy for involuntarily terminated employees (and spouses and dependents) has been extended and expanded again. Be alert for the passage of pending legislation that would extend the subsidy even further.

Extended

An individual who is eligible for COBRA coverage due to an involuntary termination of employment between September 1, 2008 and March 31, 2010—extended from February 28, 2010—is an "assistance eligible individual" eligible for the subsidy.

Expanded

An individual who lost health coverage due to a reduction of hours between September 1, 2008 and March 31, 2010 and who experiences an involuntary termination of employment between March 2 and March 31, 2010, is an "assistance eligible individual" eligible for
the subsidy.

New Election for Terminations after a Reduction in Hours

An employee who

• lost health coverage because of a reduction in hours between September 1, 2008 and March 31, 2010;

• either did not elect COBRA coverage or elected but subsequently dropped COBRA coverage; and

• is involuntarily terminated after March 1, 2010

must be given a 60 day period following the involuntary termination to elect subsidized COBRA coverage. The COBRA coverage would begin on the date of the involuntary termination, not the date of the reduction in hours, but the maximum COBRA period runs from the reduction in hours. COBRA coverage will not be retroactive to the date of the reduction in hours. The former employee cannot be required to pay for COBRA coverage for any period before the date of the involuntary termination. 

Past Oppenheimer Alerts on this Topic

COBRA Subsidy Extension (12.28.09) 

DOL Issues Model Notices for American Recovery and Reinvestment Act (3.20.09) 

New COBRA Changes Require Immediate Employer Action (2.19.09) 

Contact Us

If you have questions about your plan, or the content of this alert, please contact a member of Oppenheimer’s Employee Benefits Group.

This alert is a copyrighted publication produced by Oppenheimer Wolff & Donnelly LLP. The information contained in this alert is of a general nature and is subject to change. Readers should not act without further inquiry and/or consultation with legal counsel.