On March 2, 2010, President Barak Obama signed a bill that provides an additional 31-day extension to the original federal COBRA subsidy created by the American Recovery and Reinvestment Act of 2009 (ARRA) and extended on December 19, 2009, by the Department of Defense Appropriations Act 2010 (2010 DOD Act).

Under the ARRA, the federal government pays 65% of COBRA premiums for up to fifteen months for employees who were involuntarily terminated between September 1, 2008, and February 28, 2010. The latest extension allows employees who were terminated up to
March 31, 2010 to be eligible for the subsidy.

WHAT THIS MEANS TO YOU AS AN EMPLOYER?

The legislation will extend:

• The subsidy to individuals who are involuntarily terminated between March 1 and
  March 31, 2010.
• The new regulation will also allow employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment. This rule only applies to periods of coverage beginning after March 2, 2010.
  

WHAT SHOULD I DO NEXT?
Employers and other health plan sponsors need to revise their COBRA notices to reflect the new March 31, 2010, subsidy eligibility expiration date. Additionally, participants that had a qualifying event date of March 1, 2010, who were notified just before the extension was approved will now need to be advised of the subsidy.

If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or CLICK HERE to contact us today.

Corporate Synergies is pleased to provide regular updates on issues affecting group benefits insurance. As an insurance broker and consultant, Corporate Synergies is proactive in monitoring federal and state legislative and regulatory activity to ensure that you stay informed. Our customers call us their “Dedicated Advocates”. We work on your behalf.