Reminder: COBRA Extension in 2010 Defense Budget

Today's Federal Register included the following notice relating to the extension of premium reductions for COBRA benefits when an employee is involuntarily terminated. It is worth passing on the information as a reminder:

• On December 19, 2009, President Obama signed the Department of Defense Appropriations Act of 2010 (Pub. L. 111–118), which extends the availability of the health care continuation coverage premium reduction provided for COBRA and other health care continuation coverage as required by the American Recovery and Reinvestment Act (ARRA) of 2009 (Pub. L. 111–5). Assistance eligible individuals now can be eligible for the subsidy if they incur an involuntary termination of employment triggering a COBRA election opportunity by February 28, 2010. Before the extension, Assistance Eligible Individuals had to experience an involuntary termination of employment by December 31, 2009. The length of the premium assistance period also is extended from 9 months to 15 months.

Additional information on the extension can be found at this DOL website: http://www.dol.gov/ebsa/cobra.html. The link on this page to the IRS website (COBRA Health Insurance Continuation Premium Subsidy) is particularly helpful because the IRS goes into considerable detail for employers wanting to claim the tax credit that funds the COBRA subsidy.

The old model notice (not yet updated to account for the new dates in the COBRA extension) along with other notices can be found here: http://www.dol.gov/ebsa/COBRAmodelnotice.html