COBRA Subsidy May Enjoy 2 More Months of Daylight

Earlier this week, I wrote a short post – State of the COBRA Subsidy – that I hope provided context for the recent legislative push-and-pull around COBRA subsidies.

To recap, existing COBRA subsidies which were signed into law in February of 2009, provide a 65% subsidy of continuing health coverage following involuntary employee termination.  As of today, this subsidy program is set to expire December 31, 2009.

The U.S. House of Representatives passed a bill on Wednesday afternoon that extends COBRA subsidies into 2010.  Included as a section of the 2010 Department of Defense Appropriations Act, this $13 billion stipulation extends the COBRA premiums subsidy from the previously dictated nine-month window to 15 months.  It also changes the date of eligibility for the ARRA subsidy (i.e. the last date at which the subsidy would remain valid) from December 31, 2009 until February 28, 2010 – a two-month extension.

While this measure has passed in the House, it has yet to be taken up in the Senate, (though it is scheduled for consideration next week).

Other alterations to existing COBRA legislation can be found in the pending “Jobs for Main Street Act.” The main difference between this measure and the DOD measure is that “Jobs for Main Street” calls for a six-month extension of the subsidy (until June 30, 2010).  Indicators suggest that the House will approve this measure, but the Senate is unlikely to consider it this year.

The key takeaway from these developments is that, based on the DOD Appropriations segment pertaining to COBRA, enrollees can very likely anticipate a subsidy extension.

Again, we’ll keep our eyes and ears open for developments.  Feel free to contact us if you have any questions.

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