ARRA COBRA PREMIUM ASSISTANCE ENDING

With the end of 2009 fast approaching, questions have arisen regarding the medical insurance continuation (COBRA) premium assistance under the American Recovery and Reinvestment Act (ARRA).  Under this program, eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit.  The COBRA premium assistance under the ARRA applies to qualified employees who involuntarily lose their jobs between September 1, 2008 and December 31, 2009.  However, if the employee loses his or her job in December 2009 but does not become eligible for COBRA until January 2010 (for example, because the employer has paid the premiums for the employee’s health insurance through December 31, 2009), the employee will not be eligible for the premium assistance unless legislation is passed and signed into law extending this benefit.  To check for updates, visit the U.S. Department of Labor’s COBRA website.  The COBRA website also has answers to frequently asked questions and is the source for the information in this posting.

Even though the premium assistance program is scheduled to end on December 31, 2009, qualified individuals who become eligible before year end will be entitled to the full nine months of COBRA premium assistance as long as they continue to meet the eligibility requirements for the program.  For example, if an eligible individual started COBRA on December 1, 2009, he or she would be entitled to COBRA assistance through August 31, 2009 unless his or her circumstances changed (such as by obtaining a new job with health insurance benefits) and he or she was no longer eligible for the premium assistance.

 This posting is a brief summary only and is not legal advice and should not be relied on for any purpose.  Please be aware that the law may have changed after this posting was written on December 12, 2009.

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