House Passes COBRA Subsidy Extension and Expansion

House Passes COBRA Subsidy Extension and Expansion
December 16, 2009 at 4:44 pm by: HR Hero Alerts

http://employmentlawpost.com/hrnews/2009/12/16/cobra-subsidy-extension-provisions-likely-to-be-enacted-as-part-of-dod-appropriations-act/

By John Hickman and Ashley Gillihan

The House voted 395-34 today to pass the COBRA subsidy extension
and expansion as part of the House Amendment to the Senate
Amendment to H.R. 3326 - Department of Defense Appropriations
Act, 2010. The text can be found as Section 1010 starting on page
153. The measure will now return to the Senate for final
approval. If enacted in its current form, the provision would:

1. Change the end date of eligibility for the American
Recovery and Reinvestment Act's (ARRA) COBRA subsidy from
December 31, 2009, to February 28, 2010.
2. Expand the ARRA's COBRA premium subsidy period to 15 months
(from the current nine months).
3. Allow a period for the retroactive payment of premiums for
assistance-eligible individuals (i.e., individuals who were
entitled to the subsidy) whose subsidy period expired on
November 30 and who failed to pay their premium for December
coverage. The retroactive period is 60 days, commencing with
the enactment of the provision or, if later, 30 days after
provision of the notice described below in bullet (4). The
same refund/credit rules under the original bill apply to any
assistance-eligible individual whose subsidy expired in
November and who has since paid the full COBRA premium.
4. Require a special notice to all assistance-eligible
individuals who are on COBRA on or after November 1 or whose
qualifying event is a termination of employment occurring on
or after November 1 describing the new 15-month premium
subsidy. Note: Going forward, most administrators will
incorporate this additional notice in their standard COBRA
package.
5. Address an issue with regard to the original COBRA subsidy
(i.e., both the qualifying event and the 18-month COBRA period
must commence before the original sunset date of December 31)
by conditioning eligibility for the COBRA subsidy only on a
qualifying event that is the involuntary termination of
employment occurring on or before the new February 28, 2010,
sunset date, without regard to when the COBRA coverage period
begins. Thus, for employers providing subsidized coverage that
defers the COBRA start date, the 15-month period (which is
applicable only to the COBRA period) may not commence until
well into the future.

Later in the day, the House also passed more narrowly (217-212) a
major appropriations bill with a provision that would extend the
premium subsidy to those who lose their jobs through June 30,
2010. Its prospects of passing the Senate, however, are not
viewed as great as for the bill that passed the House earlier in
the day.

We will continue to follow these bills and keep you posted on
developments as they occur.

If and when a final bill is passed, HRhero will hold an audio
event for employers, plan administrators, HR managers, and others
to provide guidance on your compliance obligations.

Keep up with the latest legal changes affecting employer benefits
and trends in employee benefits with the Benefits and
Compensation Law Alert and Benefits and Compensation Law for
Nonprofits