E-Newsletter

April 2010, Vol. 2

Another Short-Term COBRA Subsidy Extension (now through May 31, 2010)

Keith E. Kopplin, Esq.

As anticipated, President Obama signed H.R. 4851 into law late in the evening on Thursday, April 15, 2010. Among other things, the law extends the COBRA subsidy to individuals losing coverage due to an involuntary loss of employment occurring from April 1, 2010, through May 31, 2010. The previous short-term extension had expired on March 31, 2010.

Originally included as part of the American Recovery and Reinvestment Act of 2009, and amended now for the third time, the COBRA subsidy provisions offer health insurance continuation to individuals who lose coverage due to the involuntary loss of employment occurring at any time between September 1, 2008, and May 31, 2010, for 35% of the amount they would otherwise be required to pay for such coverage. The remaining 65% is subsidized by the federal government through a tax credit to the employer or other coverage provider.

As originally enacted, the subsidy could extend for as long as 9 months. Through previous extensions, however, the maximum period of subsidy was extended to 15 months. Also through previous extensions, subsidy eligibility was expanded to include individuals who lose coverage due to a reduction in hours, provided they subsequently suffer an involuntary loss of employment on, or after, March 2, 2010. As with previous extensions, the U.S. Department of Labor is expected to issue revised model notices in the near future. For more background regarding the COBRA subsidy, see the following Krukowski & Costello e-Newsletters:

January 2010 - With Subsidy Extended, Department of Labor Issues Revised Model COBRA Notices

December 2009 - COBRA Subsidy Provisions of ARRA Extended

June 2009 - COBRA Subsidy Update: DOL Issues Application for Expedited Review

March 2009 - COBRA Compliance, Steps to Take Now

February 2009 - COBRA Premium Assistance Provisions of 2009 Federal Stimulus Package: Immediate Employer Action Required.

As the ink dries on H.R. 4851, there is pending legislation (H.R. 4213) that would extend the deadline for subsidy eligibility to the end of the year. The Senate has already cleared the measure, and President Obama has publicly endorsed the idea, but the House of Representatives has yet to act on it.

For guidance on this and other employment law questions, contact Krukowski & Costello, S.C.'s educational services department at (414) 423-1330.