COBRA Subsidy Extended to May 31, 2010

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Yesterday, April 15, 2010, President Obama signed H.R. 4851, known as the "Continuing Extension Act of 2010" into law. The Act included an extension of unemployment benefits as well as an extension and improvement of premium assistance for COBRA benefits. The extension of COBRA benefits is effective immediately and retroactive to April 1, 2010.

Prior to the enactment of this bill, COBRA premium assistance was not available to anyone terminated after March 31, 2010 due to the expiration of the previous extensions. This most recent extension will immediately allow those who experience one of two types of qualifying events to be considered an assistance-eligible individual for purposes of the COBRA premium assistance. The first qualifying event is an involuntary termination of employment through May 31, 2010. The second qualifying event is a reduction in hours followed by an involuntary termination of employment if that involuntary termination occurs on or after March 2, 2010, and on or before May 31, 2010.

Although the Act was not passed until April 15, 2010, the legislation includes language for retroactive eligibility for those who experienced an involuntary termination of employment on or after April 1, 2010.

As with previous extensions, those who are assistance eligible individuals will be eligible for up to 15 months of reduced premiums.

If the Department of Labor provides revised Model Notices reflecting this newest extension, we will update you with the necessary information.

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