Last Thursday, April 15th, 2010, Congress passed, and President Obama signed in to law, The Continuing Extension Act (CEA) of 2010 (H.R.4851).  The CEA extends the 65% COBRA subsidy for involuntary termination for an additional two months (through May 31st, 2010). 

 

Last month, Congress extended the COBRA subsidy eligibility period to March 31, 2010, but Congress failed to further extend the deadline prior to the March 31st expiration. The CEA extends eligibility retroactively, so Assistance Eligible Individuals (AEIs) involuntarily terminated after March 31st but before the Extension Act was passed are now eligible to receive the subsidy.  The CEA does not change the amount or duration of the subsidy.

 

Notice of the availability of the subsidy must be provided to qualified beneficiaries who experienced a COBRA qualifying event that was a termination of employment on or after April 1, 2010 (and prior to the CEA's enactment on April 15) if they have not been notified of the subsidy availability. This notice must be provided by June 14, 2010 (within 60 days of the CEA's enactment).

 

In addition, the COBRA election period for such individuals who have not elected COBRA coverage must be extended to 60 days following notification. Steps will also have to be taken to refund or credit premiums with regard to those new assistance eligible individuals who already started to pay the full COBRA premium.

 
Another bill has passed both the House and the Senate which would extend the subsidy through December 31, 2010. Due to differences in the two versions of this bill, it must be reconciled before it can be signed into law.