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New extension of COBRA assistance

4/19/2010 4:17:54 PM

Summary … The eligibility period for the federal COBRA premium subsidy has been extended to those who involuntarily lose employment on or before May 31, 2010.

Full story … On April 15, 2010, President Obama signed into law another extension of the COBRA premium subsidy which pays 65% of premium costs for eligible individuals who continue their health coverage under terms of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Recent amendments to the COBRA law include the following changes related to the COBRA premium subsidy:

• The new law extends the subsidy to those who lost coverage due to an involuntary termination of employment between September 1, 2008 and May 31, 2010 (though the actual date an individual’s AFTRA Health Plan coverage ends following an involuntary termination of employment may be later than May 31, 2010). 
• The subsidy continues to be available for up to a maximum of 15 months. The subsidy could end sooner if the person becomes eligible for other health insurance or Medicare. 
• The new law as amended also extendsthe subsidy to individuals who lose coverage as a result of a reduction of hours which is followed by an involuntary termination of employment occurring on or after March 2, 2010 but by May 31, 2010. In these cases the subsidy is available for up to 15 months from the date of reduction in hours – not the date that employment was lost. Note that individuals do not need to pay the COBRA premiums for the period between the reduction in hours and the involuntary termination, and the subsidy applies to individuals who did not make (or who made and later discontinued) an election for COBRA coverage based upon the reduction of hours.
• AFTRA H&R will also provide any notifications to individuals who may be eligible for assistance about the availability of the extended COBRA premium subsidy as required by the new law. 

All other rules and procedures with regard to the COBRA premium subsidy remain unchanged, as enacted by the American Recovery and Reinvestment Act (ARRA) of 2009 and as amended by the Department of Defense Appropriations Act of 2010, the Temporary Extension Act of 2010 and the Continuing Extension Act of 2010.

To apply for the premium subsidy, eligible individuals must submit a COBRA Election Form as well as a COBRA ARRA Request for Treatment as an Assistance Eligible Individual within 60 days of the date of the termination of active coverage. If you have any questions, please call Participant Services at 1-800-562-4690.

Additional resources for COBRA continuation coverage assistance are available at the Department of Labor's Web site.