Provisions Of The Cobra Subsidy Extended And Expanded

The American Recovery and Reinvestment Act of 2009 (ARRA) provided for premium reductions for individuals eligible for health benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA). An eligible individual would pay thirty-five (35%) percent of their COBRA premiums with their employer paying the balance for a period of nine (9) months. Employers would receive a payroll tax credit equal to the amount they paid towards COBRA.

First, an individual is now eligible if involuntarily terminated between September 1, 2008 and March 31, 2010. Second, also eligible for the subsidy are individuals who experienced a reduction in hours which triggered a loss of health coverage followed by an involuntary termination occurring on or after March 2, 2010 but by March 31, 2010. A further extension of the COBRA subsidy, beyond March 31, 2010, is likely.