Another COBRA Subsidy Extension
By Kristy N. Britsch
On April 15, 2010, President Obama signed into law the Continuing Extension Act of 2010 (the “CEA”), which, once again, extends the COBRA subsidy program through May 31, 2010. A summary of the CEA is as follows:
1. Extended Expiration Date. The COBRA subsidy program will be available for a loss of group health coverage due to:
- (a) an involuntary termination of employment on or after September 1, 2008, through May 31, 2010; and
- (b) a reduction in hours followed by a subsequent involuntary termination of employment occurring on or after March 2, 2010, and ending on or before May 31, 2010.
2.
Transition Relief. For individuals who experienced a termination of employment on or after April 1, 2010, but before April 16, 2010, the CEA requires the plan administrator to notify such individuals by June 15, 2010, of their rights to the COBRA subsidy and to allow those individuals the option of electing COBRA coverage within a 60-day period.
The CEA does not change the length of the COBRA subsidy coverage period. It is still based on the involuntary termination date or the reduction in hours date for up to 15 months.
Stay tuned for future COBRA subsidy extensions as this scenario is likely to continue for the remainder of this year.
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