President Signs COBRA Subsidy Extension Legislation into Law
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.
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Want to learn more? Tune in to the HR Hero audio event “New COBRA Subsidy Extension: Step-by-Step Guidance for Employers” presented by Ashley Gillihan, an attorney who advises employers on health and welfare employee benefit compliance, on January 20 and February 4. For more information, call (800) 274-6774.
Also, you can keep up with the latest legal changes affecting employer benefits and trends in employee benefits with the Benefits and Compensation Law Alert and Benefits and Compensation Law for Nonprofits.
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Tuesday, December 22nd, 2009 at 12:20 am under
My prayers have been answered at least for 6 more months…Thanks
December 22nd, 2009 at 3:29 amDoes 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!!!
December 22nd, 2009 at 4:08 amPraise 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!
December 22nd, 2009 at 4:50 am[...] 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. [...]
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December 22nd, 2009 at 1:14 pmI 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?
December 22nd, 2009 at 3:04 pmSusan,
December 22nd, 2009 at 6:32 pmI 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?
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.
December 22nd, 2009 at 7:37 pmA 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.
December 22nd, 2009 at 7:57 pmThis 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.
December 23rd, 2009 at 4:02 pmNot 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.
December 23rd, 2009 at 7:16 pmThis 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!
December 23rd, 2009 at 9:12 pmCobra 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…
December 29th, 2009 at 1:09 amwhen does the law take affect? my rates have not dropped for january yet…just checked and the csr’s I called are clueless
December 31st, 2009 at 8:25 pmThis 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.
January 5th, 2010 at 9:39 pmI 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.
January 14th, 2010 at 12:02 amI’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?
February 5th, 2010 at 10:41 amWhen will the President sign the new COBRA extension? My husband was laid off in April, 2010. What are the exact dates now?
April 22nd, 2010 at 9:01 am