COBRA Subsidy Extended Again

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The Continuing Extension Act of 2010, signed into law on April 15, 2010, extends the previously established COBRA subsidy program by extending to May 31, 2010 the period during which an involuntary termination of employment triggers eligibility for the 65% premium subsidy. The extension is retroactive to April 1, 2010.

For individuals who became eligible for the COBRA subsidy when it was first available on March 1, 2009, the nine-month premium subsidy period ended on November 30, 2009. A subsequent amendment extended the period of eligibility for subsidy relief to February 28, 2010 and extended the duration of the subsidy from nine months to 15 months. An ensuing amendment further extended the subsidy period to March 31, 2010, and also expanded eligibility to individuals who lost coverage due to a reduction in hours and were later involuntarily terminated, implemented an additional enforcement penalty, and provided guidance regarding the determination of whether an employee’s termination was involuntary. The Continuing Extension Act of 2010 now extends subsidy relief for COBRA-qualified beneficiaries who are involuntarily terminated on or before May 31, 2010.

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