COBRA and state mini-COBRA 
subsidies extended

On December 19, 2009, President Barack Obama signed an extension of the COBRA subsidy program originally introduced under the American Recovery and Reinvestment Act of 2009 (ARRA).

ARRA provides for a federal subsidy of 65 percent of the COBRA continuation coverage premiums for qualified beneficiaries receiving COBRA continuation coverage due to involuntary termination of employment between September 1, 2008, and December 31, 2009. These individuals, referred to as "assistance-eligible individuals" or "AEIs," were entitled to receive the subsidy for up to nine months.

under the new COBRA subsidy extension provision:

• The end date of eligibility for the premium subsidy has been extended from December 31, 2009, to February 28, 2010. 
• The ARRA premium subsidy period has been increased to 15 months, from the current 9 months. 
• Those who have lost their subsidy by completing their 9 months in November or later are grandfathered in under the new law and may receive 6 additional months of the subsidy. 
• Employees who are involuntary terminated on or before February 28, 2010, are eligible for the subsidy, regardless of when their COBRA eligibility period begins. This addresses a congressional oversight in the original bill pertaining to December 31, 2009, qualifying events. 
• Employers must send additional notices regarding the amendments to assistance-eligible individuals, who are covered under COBRA on or after November 1, 2009, or who qualify for COBRA due to being involuntarily terminated on or after November 1, 2009, describing the extended subsidy program.
• Note: Employers may provide such notice to newly affected individuals by providing a COBRA election notice that has been updated to include the appropriate information. Keep in mind that any individuals who have already received an election notice or individuals already covered under COBRA must receive a special notice describing the extended subsidy program.

• The provision also allows a period for the retroactive payment of premiums for assistance-eligible individuals whose subsidy period expired on November 16, 2009, and who failed to continue to pay their premiums.
• Note: The retroactive payment grace period is 60 days from December 21, 2009, or, if later, 30 days after the date that the subsidy extension notice is provided.

• The same refund and credit rules under the original ARRA bill apply to any assistance-eligible individual whose subsidy expired in November and who has since paid the full COBRA premium.
• The original subsidy eligibility requirements have been amended to clarify that eligibility to receive the subsidy is determined solely by the date that the individual was involuntarily terminated from employment and not the date on which the assistance-eligible individual begins COBRA coverage.

impact on state continuation coverage:

• The premium subsidy program also applies to group health plans subject to state continuation "mini-COBRA" requirements that are regulated by state departments of insurance.
• The subsidy period for state continuation will vary by state but cannot exceed 15 months regardless of state continuation rules.

additional information

If you would like to review the full text of the Department of Defense Appropriations Act, 2010, go to http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3326enr.txt.pdf. If you
would like to learn more about the COBRA subsidy program in general, you may visit the following online
resource: Department of Labor ARRA COBRA information: http://www.dol.gov/ebsa/cobra.html.

Source: Anthem Blue Cross Blue Sheild