The COBRA Premium Subsidy has been extended with President Obama signing into law on December 21st.
The bill would extend the nine-month, 65 percent premium federal subsidy by six months. The change would apply to those who are involuntarily terminated through February 28, 2010, and would also would provide another six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.
In addition, the legislation would give beneficiaries whose subsidy expired and who didn’t pay the full premium the opportunity to receive retroactive coverage. For example, a beneficiary whose nine months of subsidized coverage ran out November 30 and who didn’t pay the unsubsidized premium for December could pay his or her 35 percent share in January and receive COBRA coverage for December.
The legislation requires employers to notify current and future COBRA beneficiaries of the new 15-month premium subsidy. Employers can offset future COBRA premiums or issue refund checks for beneficiaries who overpaid their COBRA premium. This could happen if a beneficiary whose subsidy ran out in November paid the full premium rather than the 35 percent share in December.
To learn more about how the extension of the COBRA subsidy will impact your company register for a free webinar on How to Solve the Riddle of Employee Leave Law on January on January 7th presented by John Boggs, nationally recongized labor and employment attorney.
Wage and hour law continues to be a hot topic for our clients. Just when we have learned how to deal with that last batch of new regulations on paying employees, record-keeping and employee classification the