COBRA Subsidy Extended
President Barack Obama signed into law an extension of the COBRA subsidy created by the American Reinvestment and Recovery Act of 2009. The original law allowed for individuals who were involuntarily terminated or had another qualifying event between September 2, 2008 and December 31, 2009 to receive a 65% subsidy for continuation of insurance coverage under COBRA. When the law was passed it was anticipated that the economy would rebound more quickly than it has. When it became apparent that economic recovery would take longer, three proposals to extend the subsidy were introduced this past fall.
The extension, which was added to the House Department of Defense Appropriations bill for 2010 and signed by the President on December 21, 2009, expands the maximum COBRA subsidy period from 9 to 15 months, and extends the eligibility date for the subsidy to February 28, 2010.
Plan administrators are required to send notices of eligibility rights to those individuals who have a qualifying event on or after October 31, 2009.