An Overview of the COBRA Extension

Secova Inc. released the following summary of the new law extending eligibility for the COBRA Premium Subsidy:

1. People who were laid off before December 31, 2009 are eligible for ARRA premium reduction for an additional two months (through February 28, 2010) if they elect COBRA.
2. The COBRA premium subsidy is available for an additional six months for a total of 15 months. Employees and employers should not confuse the COBRA premium subsidy with the length of COBRA coverage itself.
3. Retroactive payments are allowed for reinstatement in some cases. Those who failed to pay their COBRA premiums once their initial subsidy period expired can pay the premiums retroactively to maintain COBRA at subsidized rates for an additional six months (not to exceed 15 months).
4. The new law requires notices to the following people:
(a) People who are eligible for the subsidy extension or have experienced a qualifying event on or after October 31, 2009.
(b) People who are eligible to make premium payments retroactive because they let their COBRA coverage expire once their subsidy period ended.
(c) People who are entitled to a reimbursement or credit because they were eligible for additional assistance, but paid the full amount of the premium coverage.

The extension of the COBRA premium subsidy gives very little time to implement new administrative procedures and meet the new notice requirements. The Departments of Labor, Treasury, and Health and Human Services are continually releasing clarifications

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