In February of 2009, President Obama signed into law the American Recovery and Reinvestment Act. Designed as part of the economic stimulus bill, this also provides some major assistance to COBRA coverage for certain individuals. Some of the major points to this bill are:
- Will provide for a federal subsidyon the COBRA continuation coverage premiums for qualified beneficiaries due to involuntary termination of employment between Sept. 1, 2008 and Dec. 31, 2009 (Assistance Eligible Individuals)
- Qualified beneficiaries will include the covered employee, the covered employee’s spouse, and covered employee’s dependent children. This means that the spouse or dependents of the involuntarily terminated employee will be eligible for benefits even if the employee does not elect COBRA.
- There will be a federally provided COBRA subsidy of 65% of the amount owed by the Assistance Eligible Individual (AEI). A payment of 35% made by the AEI is considered payment in full. The remaining amount will be covered by the plan, insurer, or employer and will be reimbursed by the government via payroll tax credits. Note – this subsidy is not offered to health flexible spending account plans.
- Those qualified beneficiaries that experienced involuntary termination of employment between September 1, 2008 and February 17, 2009 who did not elect COBRA during the initial 60 day period will now be provided another 60 day election period during which to elect COBRA coverage.
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Tags: COBRA, group health
