Liebmann, Conway, Olejniczak & Jerry, S.C.
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New COBRA Notices Due by February 17, 2010
Subsidy Extension Requires Attention
On December 19, 2009, President Obama signed legislation extending the federal COBRA subsidy benefits that were created last year under the American Recovery and Reinvestment Act of 2009 ("ARRA"). This legislation will require HR professionals to be familiar with the new rules, create and send new COBRA notification forms (or ensure that their third party COBRA administrators comply with the notice procedures) and, in some cases, provide refunds to eligible COBRA participants who paid full COBRA premiums and will now be entitled to reduced payments.
Under the new legislation, the deadline for eligibility for COBRA subsidy benefits was extended from December 31, 2009 to February 28, 2010. This means that eligible employees who suffer a "qualifying event" prior to February 28, 2010 will be entitled to the subsidy. The other basic rules for eligibility, including the personal income ceilings, remain unchanged.
An even greater benefit was provided to COBRA participants under the new legislation by expanding the period of available subsidy from nine months to 15 months. Not only does the provision nearly double the length of the availability of the subsidy, it applies retroactively, meaning that COBRA participants who were eligible for COBRA subsidy last year can secure new subsidy benefits if they remain eligible for COBRA.
Both of these changes require employers or their third-party benefit administrators to issue a host of new notices to ensure that COBRA participants are properly advised of the new rules and to allow them to take advantage of the benefits, including the retroactive coverage.
Click here for the additional highlights of the COBRA subsidy extension.
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