AZ USA: Tuesday, February 17 - 2009
New Legislation Proposes an Extension to COBRA Benefits
The American Recovery and Reinvestment Act of 2009 (ARRA) offered insurance relief to laid-off workers by subsidizing 65% of their COBRA premium. The act offered COBRA Participants up to nine months of subsidized rates. With the first eligible ARRA participants starting on March 1, 2009, their subsidized premiums are due to end on November 30, 2009.
Although the economy has been gradually getting better, unemployment is still moving higher. Companies are salvaging their bottom line but don’t seem to be in a rush to begin hiring. It is anticipated that the unemployment rate will hover around the 10% level through 2010. Because of this, Congressman Joe Sestak has introduced new legislation (H.R. 3930) to amend ARRA by extending the eligibility period and maximum assistance period for COBRA premium assistance.
If the new bill is passed as it was introduced, it would extend COBRA benefits in three ways. First, it would extend the total allowed amount of subsidized premiums from nine (9) months to fifteen (15) months. Second, it would temporarily extend the total amount of allowed COBRA coverage for individuals who experience a qualifying event due to “Termination of Employment” or “Reduction of Work Hours” from eighteen (18) months to twenty-four (24) months. Third, it would extend the qualifying eligibility period that is due to expire on December 31, 2009 for six (6) additional months to June, 30, 2010.
Please remember that this is newly introduced legislation and at this time has not been enacted by the Senate and House of Representatives. Therefore, COBRA Solutions will continue to monitor the new bill and will keep all of our clients up-to-date as changes become clearer. Please rest assured, if the bill is passed, we will update the COBRA Administration Manager software to meet the new law requirements and make the updates available for download as soon as possible.