Tonkon

Legal Updates & Alerts

COBRA Premium Subsidy Extended Again

May 5, 2010

COBRA Premium Subsidy Extended Again  

Congress has passed, and the President has signed, the Continuing Extension Act of 2010 (the "Continuing Extension"), which again extends the COBRA premium subsidy program created by the American Recovery and Reinvestment Act of 2009 (ARRA). The highlights of the Continuing Extension include:

Extension of Eligibility Period for Involuntary Terminations. ARRA, as previously amended and extended, provided a COBRA premium subsidy for employees (and their families) who were involuntarily terminated between September 1, 2008 and March 31, 2010. The Continuing Extension extends this period for two additional months, through May 31, 2010.

Extended Election Period for Certain Individuals. The Continuing Extension was signed by the President and enacted on April 15, 2010, but is effective retroactively. As a result, individuals who were terminated from employment from April 1 through April 14 may be retroactively entitled to premium subsidy rights and must receive notice of those rights. According to the Continuing Extension, rules similar to those included in the original ARRA apply to such individuals. Under those rules, it appears that an individual who has not elected COBRA as of the April 15 date of enactment (but who would otherwise be entitled to the premium subsidy) has a right to a new election notice and new 60-day election period.

DOL Webpage Updated. The DOL has updated some of the information on its premium subsidy webpage. The DOL has not yet revised or supplemented the model notices previously made available on its website.

If you have any questions or concerns, contact Darcy Norville (darcy.norville@tonkon.com) at 503.802.2036, or Blerina Kotori (blerina.kotori@tonkon.com) at 503.802.2055.