Questions as COBRA Assistance Comes to an End

cobraThe COBRA assistance available under the American Recovery and Reinvestment Act of 2009 (ARRA) is scheduled to expire at the year-end. ARRA set up an assistance package to provide recently unemployed workers up to 65% of COBRA premiums to maintain health insurance. While popular with employees, the program has created an administrative headache and an unforeseen cost to employers seeking to survive by shedding payroll costs. The legislative subsidy will expire on January 1, 2010.

While there are reports of efforts to extend the assistance past December 31st, at present the date stands. This means employees laid off after January 1, will not receive the 65% premium subsidy. And, with a 9.8% unemployment rate, this translates into many laid off workers unable to maintain health insurance coverage without some assistance.

The U.S. Department of Labor has posted on its website some answers to common questions being raised as the year comes to an end:

Q: If an employee is involuntarily terminated prior to December 31st, but is not eligible for COBRA until after January 1st, is the employee eligible for ARRA premium assistance?

A:No. An individual who does not become eligible for COBRA until after December 31, 2009 does not meet the qualifications for assistance. The date of eligibility for COBRA coverage is determinative.

Q:What about employees who are currently receiving the subsidy or who become eligible no later than December 31st? Will they continue to benefit from the subsidy in 2010?

A: Yes. Eligible individuals are entitled to receive the full 9 months of premium assistance as long as they remain eligible. For example, if an assistance eligible individual started COBRA on November 1, 2009, they would be entitled to 9 months of ARRA premium assistance from November 1, 2009 through July 31, 2010 as long as they remained eligible.

2017-03-14T14:46:39+00:00