COBRA SUBSIDY EXTENDED
The COBRA subsidy enacted by the American Recovery and Reinvestment Act of 2009 (ARRA) has been amended and extended as of December 19, 2009 by the Department of Defense Appropriations Act, 2010 (DOD Act).
- An AEI (assistance eligible individual) is now entitled to15 months of the subsidy.
- The previous requirement that the individual had to lose coverage on or before December 31, 2009, has been modified so that now the qualifying event, which makes a qualified beneficiary eligible for COBRA continuation coverage, must occur on or before February 28, 2010.
- Any individual who was an AEI on or after October 31, 2009, or who experienced a qualifying event (consisting of termination of employment-both voluntary and involuntary) relating to COBRA continuation coverage on or after October 31, 2009 through December 19, 2009, will have to be provided with notice by February 17, 2010 of the changes made to the COBRA subsidy by the DOD Act.
- Any individual who experienced a qualifying event after December 19, 2009, will have to be provided with the COBRA election notice in the normal time frame, and that notice must contain the information regarding the changes made to the COBRA subsidy by the DOD Act.
- Any individual who lost the subsidy because the previous nine (9) months of qualification expired prior to December 19, 2009, must receive notice by February 17, 2010 of the changes made to the COBRA subsidy by the DOD Act. This notice must also advice the individual of the right to make retroactive COBRA subsidy payments to maintain his or her COBRA continuation coverage. To maintain his or her COBRA continuation coverage, this individual must make the retroactive payment(s) by February 17, 2010, or, if later, within 30 days after the required notice is provided.
- Any individual who paid the full premium, and who would have been eligible for the COBRA subsidy had the changes to the COBRA subsidy by the DOD Act been available sooner, must receive a refund or a credit against future premiums.
Should you have any questions, please feel free to call our firm to speak with Jeff Storch, Cliff Bobholz or Andrew DeClercq.
IRS CIRCULAR 230 NOTICE: To ensure our compliance with certain U.S. Treasury Regulations, please be advised that, unless expressly indicated otherwise, if this communication or any attachment to this communication contains advice relating to any Federal tax issue, the advice is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding Federal tax penalties. If any of the advice was written to support the promotion, marketing, or recommendation of any transaction or matter addressed within the meaning of Internal Revenue Service Circular 230, you should seek advice based upon your particular circumstances from an independent tax advisor.
This legal update is not legal advice. Individuals should seek advice based on their particular circumstances from their own counsel.