COBRA Premium Subsidy Extended by Obama
On December 19, 2009, President Obama signed the Department of Defense Appropriations Act, 2010 ("DDAA") extending and expanding the COBRA premium subsidy established last year. We have previously written to you in this blog on April 3, 2009 outlining the original COBRA subsidy. On January 13, 2010, the U.S. Department of Labor ("DOL"), the agency charged with responsibility for enforcing this new law, has published a model notice which must be given to any employee who is entitled to COBRA notice. You can view the new model notice online.
The new notice which is known as the “Premium Assistance Extension Notice” provides that the following employees should be given notice: (1) any "Assistance Eligible Individuals" who have received the COBRA subsidy as of October 31, 2009; (2) any employee who was involuntarily terminated after October 31, 2009 and lost health benefits coverage, but who has not been provided with the notice of their rights to a subsidy; and (3) those in a "transition period," i.e., those whose COBRA subsidy has ended because they had exhausted the original number of months provided (typically nine), but are entitled to continue the subsidy given that the duration of the subsidy to has been extended to15 months.
Individuals who fall into Groups (1) or (2) generally should receive the notice by February 17, 2010, and those in Group (3) should receive the Premium Assistance Extension Notice within 60 days after their original COBRA subsidy ended. In general, employers are well advised to simply send the extension notice to anyone qualified at the earliest time possible.
