Legislation to extend the eligibility for subsidized COBRA to employees who are involuntarily terminated up to March 31, 2010, was signed by President Obama on March 2.
The new law expands the definition of “assistance eligible individual” to include the loss of health care coverage because of a reduction in hours from September 1, 2008 – March 31, 2010, followed by involuntary termination of employment on or after March 2, 2010, but by March 31, 2010 as a qualifying event; the period continuation coverage will be determined as though the qualifying event were the reduction of hours of employment. Group health plan administrators must provide notice of the subsidy to these individuals within 60 days of the involuntary termination of employment, and comply with the rules set forth in the American Recovery and Reinvestment Act of 2009 for the original subsidy.
To qualify for the subsidy, individuals in companies with 20 or more employees must experience an involuntary termination from September 1, 2008 to March 31, 2010. The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months. For more information on the COBRA subsidy see DOL’s COBRA subsidy webpage. Note that DOL has not yet updated its notices and fact sheet to reflect the most recent extension.
