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December 2009
On December 19, 2009, President Obama signed legislation to extend the federal COBRA subsidy which pays 65% of the monthly COBRA premium for laid off workers.
The law takes effect immediately and extends the subsidy from nine months to fifteen months. The eligibility date is extended from December 31, 2009, to February 28, 2010.
The new law requires employers to give notice of the extension to all eligible individuals. The extension notice must be provided no later than February 17, 2010 for employees terminated on or before December 19, 2009 or by the time that the COBRA notice is otherwise required for terminations after December 19, 2009.
The new law will allow eligible individuals to retroactively pay the reduced COBRA premium to reinstate their COBRA coverage. The retroactive payment may be made by the later of: (1) February 17, 2010; or (2) 30 days after the employer provides the extension notice.
The Department of Labor website, www.dol.gov, does not yet appear to be updated for information or new forms to incorporate these changes. Employers should watch for these updates. Your health insurance provider may also provide you with revised forms when available. But in the meantime, employers should continue providing the special COBRA subsidy notices to individuals eligible for COBRA as a result of involuntary terminations through February 28, 2010 and continue to offer coverage to eligible laid off workers at the subsidized premium rate.
Sharon Hobbs practices in the areas of business law, employment law and estate planning.
© 2009 Rinke-Noonan.
This article is a general discussion of legal issues and is not intended to be legal advice. We would be pleased to review the specific facts and law regarding any given legal matter.
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