Are You Prepared For The COBRA Subsidy Extension?
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President Obama has signed into law the Department of Defense Appropriations Act, 2010 (H.R. 3326) extending the COBRA premium subsidy eligibility by 2 months (through February 28, 2010, from the previous December 31, 2009 deadline) and extending the 65% federal subsidy by an additional 6 months (for a total of 15 months) for involuntarily terminated employees. A statement from Phyllis Borzi, Assistant Secretary of the Employee Benefits Security Administration (EBSA) is available here.
This extension requires COBRA administrators to contact existing and future COBRA and participants to notify them of the extended subsidy period to 15 months. In addition, prior COBRA participants who had reached the end of the subsidy premium period, must also be contacted and given the opportunity to extend their coverage for the additional 6 months. These individuals will be given additional time to pay subsidized premiums under the extension as follows:
- 60 days following enactment of the Act, or, if later,
- 30 days following notice of extension provided by the plan administrator.
This Act requires employers and plan administrators to modify existing COBRA communications to notify current, future and prior COBRA participants of the extension. This Employer Alert summarizes key provisions of the Act at this time, we will report additional information as the provisions are clarified in the coming weeks. In the interim, the Sullivan Benefits team is available to assist you in understanding and implementing these new provisions.
Sullivan Benefits clients receive COBRA administration services at no additional cost. Whether you currently utilize this service or not, please note we are working on system modification changes with our software vendor, Travis Systems. New model notices, forms, etc. will be available to you as soon as these changes have been implemented. .
As always, please contact us with any questions or assistance in complying with the new COBRA regulations. |
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Needham Heights Office:
72 River Park · Needham Heights, MA 02494-2631
Phone: 781.449.8323 · Fax: 781.449.5419
Worcester Office:
One Chestnut Place · Worcester, MA 01608-2804
Phone: 508.471.9017 · Fax: 508.797.3689
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