Some of you may already be aware that President Obama very recently signed an extension of the COBRA subsidy to 15 months. From the DOL December 23rd newsletter www.dol.gov/ the following article stated: “On Monday, President Obama signed legislation extending the eligibility period for the Consolidated Omnibus Budget Reconciliation Act (COBRA) premium reduction through Feb. 28, 2010 — an additional two months — and the maximum period for receiving the subsidy for an additional six months. "Millions of unemployed Americans and their families will be better able to afford and keep their health benefit coverage because of this new law," said Assistant Secretary of the Employee Benefits Security Administration Phyllis C. Borzi.”
However, right now this only affects companies with more than 20 total employees. This applies to Federal COBRA companies, not Minnesota Continuation, or those with less than 20 employees. It will take our State legislators to make this change for Minnesota Continuation, and they are currently on break until February. They may call a special session in January to do so, but right now nothing has changed.
The following questions and answers were developed by HealthPartners’ marketing department:
1) What does the bill change? The Defense Appropriations bill extended the COBRA premium reduction from nine to 15 months. Individuals employed by an employer with 20 or more employees, who were getting the premium reduction on or after October 31, 2009, are now eligible for an additional six months of the premium reduction. The 18-month limit for COBRA coverage eligibility does not change. This extension also extends the timeframe for eligibility from December 31, 2009 to February 29, 2010. Please remember that involuntarily terminated individuals must be eligible for COBRA by the end of February 2010, which means that the last date of termination to qualify for the premium reduction is January 31, 2010. People involuntarily terminated in February aren’t technically eligible for COBRA until March 1, which falls after the end date.
2) Does this impact all employers? No. This bill extended the Federal COBRA subsidy, which applies to employers with 20 or more employees. In order for this to apply to employers with fewer than 20 employees, the State government needs to take action. Wisconsin’s legislature is still in session so it is possible they may take action to extend the subsidy; however, Minnesota’s legislature is on break and unless they call a special session, will not pass an extension until they are back in session in February.
3) When does the extension go into effect? This extension goes into effect immediately, but employers have up to 60 days to comply. Most certainly more information will be coming out in the new couple of months, and feel free to contact me with any questions or concerns.
