Congress has extended the subsidy for COBRA benefits through May 31, 2010. The previous extension of the COBRA subsidy had expired on March 31, 2010. The COBRA subsidy provides a 65% health insurance premium subsidy for up to 15 months to qualified employees who are involuntarily terminated from their employment between September 1, 2008 and May 31, 2010. The subsidy is also available to qualified employees who initially were eligible for COBRA due to a reduction in hours and then, after their hours were reduced, were involuntarily terminated between March 2, 2010 and May 31, 2010. Prior to the adoption of the COBRA subsidy, qualified employees who lost their jobs and chose to continue their health insurance under COBRA had to pay up to 102% of their health insurance premium, which was prohibitive for many unemployed workers. Employees who qualify for the subsidy only need to pay 35% of the premium amount during the subsidy period.
The U.S. Department of Labor has posted the details regarding implementation of the COBRA subsidy extension on its website at www.dol.gov/ebsa/COBRA.html.
This posting is a brief and incomplete summary of a very complex law, and should not be relied upon for any purpose. Additionally, the law may have changed or may have been clarified by the Department of Labor or the IRS after this posting was written on April 20, 2010.