COBRA Premium Subsidy Program Extended: Immediate Notification Required

December 2009

On December 19, 2009, President Obama signed legislation which extends the availability of the government subsidy for continuation health coverage (referred to in this Alert as "COBRA") in connection with an involuntary termination that occurred, or will occur, between September 1, 2008 and February 28, 2010 (the "Revised Program").

The COBRA subsidy program was initially authorized under the American Recovery and Reinvestment Tax Act of 2009, and provides assistance eligible individuals with a 65% reduction in the COBRA premium for up to 9 months (the "Original Program"). Following is a link to our March 2009 Client Alert describing the Original Program: http://www.pbwt.com/new-federal-cobra-subsidy-law-requires-prompt-employer-action/.

This alert describes 1) aspects of the original program which remain unchanged; 2) the expansion of the original program; 3) retroactive payment opportunity; 4) new notification requirements; and 5) immediate action required.