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    COBRA Subsidy Extended Once Again

    Late yesterday, President Obama signed into law another short-term extension of COBRA health insurance premium subsidies for employees who are terminated involuntarily.   This law takes immediate effect and is retroactive to April 1, 2010.

    Effectively, the new law takes the last extension and replaces the "March 31, 2010" date with the new "May 31, 2010" date.  The 15-month 65% federal premium subsidy is now extended so that employees who were involuntarily terminated between April 1 through May 31 are eligible.  As with the previous extension, only Assistance Eligible Individuals (AIs) qualify for the subsidy.   To be assistance eligible, the employee has to have an involuntary termination of employment.    If the individual lost coverage as a result of a reduction in hours which was then followed by an involuntary termination of employment, that person is eligible for the subsidy if that involuntary termination occurs on or after March 2, 2010, and on or before May 31, 2010.   This part does not apply to terminations prior to March 2, 2010.

    The new law does not change the length of the COBRA maximum coverage period. It is still based on the original reduction in hours Qualifying Event date.  Also, the subsidy period (up to 15 months) is unchanged.


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