NEW! - COBRA Temporary Extension Act of 2010 through 03/31/2010.
COBRA Temporary Extension Act of 2010 through 02/28/2010.
The Fiscal Year 2010 Department of Defense Appropriations Act (2010 DOD Act) includes important new
changes to the COBRA premium subsidy that was created by the American Recovery and Reinvestment Act of 2009
(ARRA). The changes made by the 2010 DOD Act are retroactive to the original February 17, 2009 ARRA enactment
date. Here are the highlights:
- Extension of Eligibility Period. ARRA provided a COBRA premium subsidy for certain employees
(and their families) who are involuntarily terminated between September 1, 2008 and December 31, 2009.
The eligibility period has been extended for an additional 2 months-- through February 28, 2010.
- Extension of Duration of Premium Subsidy. Under ARRA, assistance eligible individuals were
entitled to a subsidy for up to 9 months of their COBRA maximum coverage period. The maximum
period for receiving the COBRA premium subsidy has been extended for an additional 6 months, to 15 months.
- Additional Notification Requirements.
- individuals who are assistance eligible individuals on or after October 31, 2009, and
- individuals who have a COBRA qualifying event of termination of employment (voluntary or involuntary) on or after October 31, 2009
Updated Election Notice - In addition, notification of the changes must be provided consistent with COBRA's “normal” election notice timing rules to individuals who have a qualifying event after December 19, 2009 (the date of enactment).
The Department of Labor (DOL) has issued a new set of model notices incorporating information about the COBRA subsidy extension (for public review). The following notices are attached to this email:
- Notice of Extension (New)
- Election Notice (Updated)
- Transition Period Rules. Special rules are included for treatment of assistance eligible individuals who exhausted their full 9 months of premium assistance before the period was extended to 15 months. These individuals fall into two groups.
- The first group--those who dropped COBRA after their original 9-month subsidy period ended--must be permitted to maintain their COBRA coverage by retroactively paying premiums that were due during their "transition period." (The term "transition period" appears to mean any period of coverage beginning before December 19, 2009 during which an assistance eligible individual would have been eligible for premium assistance had the extension been available earlier.) Such individuals must make payment by February 17, 2010 or, if later, 30 days after notice of the extension is provided by their plan administrator.
- The second group--those who paid an unsubsidized premium during their transition period--must be provided with a refund or credit against future premiums.
Plan administrators must provide a notice of the extended subsidy, including information about the right to make retroactive payments, to both groups of individuals, who fall in the transition period, within the first 60 days of the individual's transition period.
- Eligibility Based on Timing of Qualifying Event. The 2010 DOD Act clarifies that for purposes of an individual's eligibility for the subsidy, as well as the timing of notices, the qualifying event is what matters, rather than eligibility for COBRA. That means the qualifying event must occur on or before February 28, 2010
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