Cobra Health Insurance Subsidy Continued EasyToInsureME

COBRA, state continuation subsidies extended

On December 19,
2009, President Barack Obama signed an extension of the COBRA subsidy
program originally introduced under the American Recovery and
Reinvestment Act of 2009 (ARRA).

ARRA provides for a federal
subsidy of 65 percent of the COBRA continuation coverage premiums for
qualified beneficiaries receiving COBRA continuation coverage due to
involuntary termination of employment between September 1, 2008, and
December 31, 2009. These individuals, referred to as
"assistance-eligible individuals" or "AEIs," were entitled to receive
the subsidy for up to nine months.

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Under the new COBRA subsidy extension provision:

* The end date of eligibility for the premium subsidy changes from December 31, 2009, to February 28, 2010.
* The ARRA premium subsidy period expands to 15 months, increased from current nine months.
* Those who have lost their subsidy by completing their nine months in
November or later are grandfathered in under the new law and may
receive six additional months of the subsidy.
* Employees who are
involuntary terminated on or before February 28, 2010, are eligible for
the subsidy, regardless of when their COBRA eligibility period begins.
This addresses a congressional oversight in the original bill
pertaining to December 31, 2009, qualifying events.
* Additional
notices will be sent regarding the amendments to assistance-eligible
individuals, as well as those who qualify for COBRA due to termination
of employment.
* The provision also allows a period for the
retroactive payment of premiums for assistance-eligible individuals
whose subsidy period expired on November 16, 2009, and who failed to
continue to pay their premiums.

* The same refund and credit
rules under the original ARRA bill apply to any assistance-eligible
individual whose subsidy expired in November and who has since paid the
full COBRA premium.

Impact on state continuation coverage:

* The premium subsidy program also applies to group health plans
subject to state continuation "mini-COBRA" requirements that are
regulated by state departments of insurance.
* The subsidy period
for state continuation will vary by state but cannot exceed 15 months
regardless of state continuation rules.