President Obama has authorized a third COBRA subsidy extension, by signing the Continuing Extension Act of 2010.
The Act retroactively extends the eligibility deadline for the COBRA subsidy from March 31, 2010 to May 31, 2010.
Update: On December 17, 2010, a new law restored emergency and extended unemployment benefits through 2011, but it did not authorize a fourth stimulus COBRA subsidy extension. As a result, the 65-percent COBRA subsidy is not available to unemployed workers who were or will be involuntarily terminated from their jobs after May 31, 2010.
You might be able to find a good deal on short-term health insurance similar to the stimulus COBRA subsidy, through eHealthInsurance or another affordable provider. If you shop around, be sure to investigate coverage differences compared to your COBRA plan and your HIPAA portability rights as well.
President Obama first authorized the COBRA subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA), also referred to as the Stimulus Act, Recovery Act, and economic stimulus law and variations. He and congress have since extended the subsidy three times.
The ARRA COBRA subsidy granted a 65-percent government subsidy to help eligible unemployed workers (and eligible dependants) pay to continue their employer-provided group health insurance benefits under COBRA for up to 9 months after involuntary employment termination.
Thanks to the first COBRA subsidy extension, the 65-percent subsidy was expanded beyond 9 months to 15. Eligible workers will pay only 35 percent of their COBRA health insurance premiums for up to 15 months while the federal government picks up the remaining 65 percent though tax credits to employers.
The second COBRA subsidy extension expanded the definition of “assistance eligible individuals” to include employees who experienced a reduction in work hours, followed by an involuntary termination on or after March 2, 2010. Previously, most employees who became eligible for COBRA benefits after losing work hours didn’t qualify for the subsidy when the involuntary-termination “trigger” followed.
The third COBRA subsidy extension includes the expansions of the first and second. It also extends the deadline for eligibility, as did the first and second. Now, workers involuntarily terminated between September 1, 2008 and May 31, 2010 potentially become eligible for the subsidy.
Workers need only to be involuntarily terminated (for reasons other than gross misconduct) on or before the May deadline to potentially become eligible for the subsidy, even if they don’t qualify to continue their health insurance through COBRA until after the deadline.
Congress had already passed a bill (H.R. 4213) that stretches out the COBRA subsidy eligibility deadline through the end of 2010; but, certain congressional Democrats and Republicans must reconcile their differences before it (or an equivalent bill) can become a new law. Meanwhile, they’ve compromised by temporarily extending the eligibility deadline through May 31.
The 65-percent COBRA subsidy is available under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) or a state equivalent law, generally referred to as a “mini-COBRA” law. In either case, COBRA plan administrators must notify workers of their eligibility for the subsidy extension.
This is just a summary of the COBRA subsidy extensions. For details that fit your particular situation, contact your COBRA plan administrator. Consult a lawyer for legal advice that fits your particular situation.
If your employer (or plan administrator) has denied you COBRA benefits or the 65-percent COBRA subsidy, then you may appeal the denial if you are otherwise entitled to same.