On March 2, 2010, the Temporary Extension Act of 2010 amended the American Recovery and Reinvestment Act of 2009 (ARRA). On April 15, 2010, the Continuing Extension Act of 2010 amended ARRA further. The amendments made the following changes concerning the COBRA continuation coverage premium subsidy:
- Extension of the premium reduction eligibility period to May 31, 2010. As a result, a qualified beneficiary who has an initial qualifying event of involuntary termination of employment during the period of September 1, 2008 through May 31, 2010 can apply for the subsidy.
- Provision that certain individuals who previously had a reduction in hours resulting in a loss of coverage and who later have an involuntary termination of employment may now apply for the subsidy. More specifically, individuals who experienced a reduction in hours during the period of September 1, 2008 through May 31, 2010 and who also experienced a subsequent involuntary termination of employment on or after March 2, 2010 and by May 31, 2010 may apply for the subsidy. These individuals may also be eligible for a second election opportunity at the time of their involuntary termination in the event they did not elect continuation coverage when the reduction in hours occurred or they elected continuation coverage at that time but subsequently discontinued it.
Impact to groups with 20 or more employees: As a reminder, groups of this size are responsible for implementing the ARRA provisions, including providing required notices, providing the subsidy, and collecting reimbursement of the subsidy through a federal payroll tax credit. Your COBRA administrator or other advisors can provide assistance with this. View COBRA regulations information.
Impact to groups with fewer than 20 employees: As a reminder, groups of this size are covered by state continuation law, rather than COBRA. In order for Medica to administer the premium subsidy, groups must continue to complete the Continuation Eligible Individual List form, and individual applicants must complete the Assistance Eligible Individual Status Request and Continuation Enrollment form.
View Frequently Asked Questions.
Please note: Updates to the Frequently Asked Questions document are in progress. The updates will reflect additional information regarding the Continuing Extension Act of 2010.