Obama Signs COBRA Subsidy Extension

An extension of the 65 percent COBRA subsidy was signed into law by President Obama on December 19, 2009. This extension extends the eligibility window for the subsidy until February 28, 2010, and also increases the subsidy period for laid-off workers to 15 months of coverage, up from the current nine months.

Under the new bill, any worker who loses his or her job before February 28, 2010, would now be eligible for the subsidy, and the subsidy will now provide 15 months of coverage as opposed to the original nine months. Workers whose coverage has already terminated after nine months of subsidy will be given the opportunity to re-enroll for the extended coverage.

All other provisions of the original bill remain intact. Health care premiums will be discounted by 65 percent and the worker would be required to pay the remaining 35 percent to maintain their health care coverage.

The government subsidizes their contribution directly with the employer and does not bill the actual employee for the full cost of the benefits.

The law also gives qualified individuals a “second chance” to elect COBRA coverage if they turned it down previously. The plan is required to notify laid-off workers of a second COBRA enrollment period. Additionally, laid-off workers can change to a plan that costs less than their original plan, if it is offered to active employees. If a company denies the premium reduction to individuals on COBRA, an expedited appeal process is available through the Department of Labor.

For more information on the COBRA subsidy, visit the special Department of Labor (DOL) website at www.dol.gov/cobra. There are also Benefits Advisors on staff at the DOL, who can be contacted at 866-444-3272.