COBRA SUBSIDY EXTENDED AGAIN
Once again President Obama signed into law another extension to the COBRA subsidy originally created by the American Recovery and Reinvestment Act ("ARRA"). This new legislation, the Temporary Extension Act ("the Act") of 2010, extends the COBRA subsidy to those involuntarily terminated through March 31, 2010.
What's New?
· The Act extends the period during which a COBRA-qualifying event resulting from an involuntary termination of employment can trigger eligibility for the subsidy. In essence, the period is extended another month from February 28, 2010 to March 31, 2010.
· The Act allows employees to receive the subsidy if they first lost group coverage due to a reduction in hours and are later terminated after enactment of the Act (i.e., after March 2, 2010). As such, an employee who did not make (or who made and discontinued) an election of COBRA continuation coverage on the basis of the reduction of hours of employment, the involuntary termination of employment of such individual on or after the date of the enactment of this paragraph shall be treated as a qualifying event.
New Notices Required
· A new notice explaining the new subsidy rules, must be issued to all individuals who experienced a qualifying event after February 28, 2010 when the prior subsidy expired.
The Department of Labor will be issuing new model notices in the next few weeks. In the meantime, your firm contact is ready to assist you in developing notices that comply with these new provisions.
These short terms extensions of the COBRA subsidy are intended to give Congress more time to consider legislation to extend this program through 2010.The Senate is currently debating H.R. 4213 which would extend the COBRA subsidy eligibility period through December 31, 2010. As such, be sure to look for updates from our Firm on the status of this important legislation.
Your contact at the Firm is ready to assist you if you have any questions about this new law.
For more information, call us today at (818) 508-3700,
or visit us on the web, at www.brgslaw.com.
Sincerely,
Richard S. Rosenberg
Partner
BRG&S, LLP
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