12/22/2009
Norbert F. Kugele
The COBRA subsidy has just been extended. With the COBRA subsidy qualification period set to expire at the end of December, President Obama signed a new law yesterday that extends the qualification period until February 28, 2010. Thus, individuals who lose their employer-provided group health plan coverage because of a layoff or other involuntary termination of employment that occurs in January or February will still qualify for the 65% COBRA subsidy. Moreover, the subsidy period is extended from 9 months to 15 months.
Here is a quick summary of the new law:
Those who lose health plan coverage because of an involuntary termination before February 28, 2010, are eligible to receive the 65% subsidy for up to 15 months.
Those currently receiving the COBRA subsidy will continue to receive the subsidy for the extended 15-month time period.
Those whose COBRA subsidy ended before this new law was enacted are also entitled to continue to receive the subsidy throughout the extended 15-month time period.
Anyone whose subsidy expired and consequently allowed his or her COBRA coverage to lapse before the enactment of the law will be eligible to retroactively reinstate COBRA coverage by submitting a 35% premium payment for the lapse period during a special retroactive enrollment period that will run for at least 60 days.
Employers will have to provide notice of the COBRA extension and special retroactive enrollment period to those eligible for the COBRA subsidy on or after October 31, 2009. This notice must be sent by February 19, 2010.
We expect more guidance from the Department of Labor in the coming days. In the meantime, if you have any questions about the extended COBRA subsidy law, please contact Norbert F. Kugele at (or by phone at 616.752.2186), or any other member of Warner's Employee Benefits Practice Group.
