HR Management & Compliance

House Passes COBRA Subsidy Extension and Expansion

Update Dec. 21, 2009: President signs bill including COBRA subsidy extension

By John Hickman and Ashley Gillihan

The House voted 395-34 today to pass the COBRA subsidy extension and expansion as part of the House Amendment to the Senate Amendment to H.R. 3326 — Department of Defense Appropriations Act, 2010. The text can be found as Section 1010 starting on page 153. The measure will now return to the Senate for final approval. If enacted in its current form, the provision would:

  1. Change the end date of eligibility for the American Recovery and Reinvestment Act’s (ARRA) COBRA subsidy from December 31, 2009, to February 28, 2010.
  2. Expand the ARRA’s COBRA premium subsidy period to 15 months (from the current nine months).
  3. Allow a period for the retroactive payment of premiums for assistance-eligible individuals (i.e., individuals who were entitled to the subsidy) whose subsidy period expired on November 30 and who failed to pay their premium for December coverage. The retroactive period is 60 days, commencing with the enactment of the provision or, if later, 30 days after provision of the notice described below in bullet (4). The same refund/credit rules under the original bill apply to any assistance-eligible individual whose subsidy expired in November and who has since paid the full COBRA premium.
  4. Require a special notice to all assistance-eligible individuals who are on COBRA on or after November 1 or whose qualifying event is a termination of employment occurring on or after November 1 describing the new 15-month premium subsidy. Note: Going forward, most administrators will incorporate this additional notice in their standard COBRA package.
  5. Address an issue with regard to the original COBRA subsidy (i.e., both the qualifying event and the 18-month COBRA period must commence before the original sunset date of December 31) by conditioning eligibility for the COBRA subsidy only on a qualifying event that is the involuntary termination of employment occurring on or before the new February 28, 2010, sunset date, without regard to when the COBRA coverage period begins. Thus, for employers providing subsidized coverage that defers the COBRA start date, the 15-month period (which is applicable only to the COBRA period) may not commence until well into the future.

Later in the day, the House also passed more narrowly (217-212) a major appropriations bill with a provision that would extend the premium subsidy to those who lose their jobs through June 30, 2010. Its prospects of passing the Senate, however, are not viewed as great as for the bill that passed the House earlier in the day.

We will continue to follow these bills and keep you posted on developments as they occur.

If and when a final bill is passed, HRhero will hold an audio event for employers, plan administrators, HR managers, and others to provide guidance on your compliance obligations.

Keep up with the latest legal changes affecting employer benefits and trends in employee benefits with the Benefits Complete Compliance


John Hickman is head of Alston + Bird’s Health Benefits Practice, where he leads five attorneys devoted exclusively to HIPAA privacy, flexible benefits, and other health and welfare benefit issues. He has been a pioneer in the consumer-directed health care arena and has worked closely with health plans, financial institutions, and employers as well as the IRS, Treasury, and DOL in developing guidance for tax-favored HRAs and HSAs.

Ashley Gillihan is counsel in the Atlanta office of law firm Alston + Bird and is a member of the firm’s Employee Benefits & Executive Compensation and ERISA Litigation Groups. He focuses his practice exclusively on health and welfare employee benefit compliance and litigation issues for employers, health plan administrators, and other health and welfare benefit plan service providers. He also has extensive experience assisting financial institutions and insurance companies that serve as HSA trustees or custodians.

31 thoughts on “House Passes COBRA Subsidy Extension and Expansion”

  1. Thanks so much. We were going to have to go without health insurance after November 30 due to previous COBRA subsidy ending and not being able to pay full COBRA premium. My health history made me ineligible for a high deductible personal policy and our ages (55 and 60) made those personal policies as expensive as our full COBRA from former employer.

  2. If this goes all the way thru then let me be one of the first to tell all of you “Bless You” and that which God allow you to give to we the people the best present to each of us that we “really needed”! Thank you from my heart, and wish each of you a very merry christmas to you and your family’s. I know you have been snow balled over this subject; but only because we each needed this help so much, not by choice, we just needed to live.
    Thank you!!!

  3. Since the Cobra Subsidy is a part of the FY2010 Defense Spending Bill in the Senate, of which could have been voted on already, but is going through the gammit with delay from the GOP, as all bills do. As far as I know the final vote will be Saturday morning, Dec. 19th.

  4. From what I understand, the Cobra Subsidy in the FY2010 Defense Spending Bill will only extend the deadline to February 28, 2010. It’s the Job’s creation bill that passed in the House yesterday, that will extend Cobra Subsidies from 9 months to 15 months. The jobs bill will likely be taken up in the Senate post the holidays. For those where Cobra might run out in Spring, not sure if the extension of Cobra from 18 months to 24 months still exists in any of these bills.

  5. If they kill this bill, the GOP will also kill the most needed funding for our American men and women fighting in Afghanistan and to support their families at home. What message would the GOP be sending to the American people. That would be one major flip-flop.

  6. Per my discussion with my congressman’s legislative assistant, the bill has to be voted on within 30 hours of the end of the filibuster that the republicans held. (Are we not surprised?) Since it ended at 3am-ish on 12/18, the vote will have to occur by 9am-ish Saturday morning, 12/20/09.

  7. Does anyone know if the following exists in either the Defense or Jobs bill. This came from Rep. Joe Sestak’s original bill.

    ‘eligibility for traditional COBRA coverage an additional six months (from 18 to 24 months) for individuals who were terminated at the beginning of the recession in 2008’.

  8. I find it fascinating that the GOP will be making a “major flip-flop” by fighting a bill that has all kinds of things tacked on to it that have nothing to do with what the bill is titled.

    It sounds more like the Democrats are playing politics as usual by layering numerous unrelated programs onto funding that is needed to provide for the families of our deployed troops which is causing something that should have sailed through uneventfully to become bogged down.

  9. I never really pay attention to what the Senate votes on until today. I know I should.

    This is sad. I make too much on unemployment to qualify for any help with medical, food, power or gas. But I don’t make enough to be able to afford $404 cobra payment. But my monthly medication bill without insurance is over $1000.

    I have always paid my way through life I have never been on welfare I use to pay my bills on time. Now I am late times which bothers me. I cannot win for losing. I get a few steps ahead and then pulled back again.

  10. Wilbur, a horse is a horse, of course of course.
    The TWO MORE MONTHS is stated as eligibility extended from Dec 31,2009 to Feb.28,2010 for ARRA. The 9 months COBRA is to be extended to 15 months for “those” which the subsidy period expired on Nov.30,2009 ( “those” will have access until the end of May 2010 )

  11. @MisterEd the 2 months is to end of eligibilty
    so anyone getting laid off Jan/Feb of 2010 can get the subsidy.

    1.Change the end date of eligibility for the American Recovery and Reinvestment Act’s (ARRA) COBRA subsidy from December 31, 2009, to February 28, 2010.
    2.Expand the ARRA’s COBRA premium subsidy period to 15 months (from the current nine months).

  12. Wake up Tony. Well I also find it fascinating that the GOP is against helping those most in need right now with 5.4 million people unemployed, 7 million people on Cobra, 17 – 20 million people either working temporary without health insurance and 47 million people uninsured. And these #’s include Republicans and Independents. Most of us have all been taxpayers for decades, over 50, like myself and to the greed of wall street and others find ourselves in this precarious situation through no fault of our own. I’ve lived through many presidencies from Eisenhower on, the tactics the Dems are using are for the peoples behalf whereas the GOP have used similar tactics on behalf of special interest and corporations only, when they have carried the majority.

  13. I was not eligible for the premium assistance for Cobra but my Cobra from my job ends in January 2010 (18 months). Will I be able to continue to get the extension and pay the full amount that I have been paying? There are so many variables for this law????

  14. My question? If we are on the cobra extention simulus and are entitle for the extended (6) months then why is cobra making everyone pd full 100% in december 2009? That was the point for the extention to help with premiums but most do not have the full amount to pd in december so will have to let cobra drop. This make any sense to anyone? We should have to pd only 35% untill cobra gets it together is how I feel. Not over pd and get credit on other payments. We need to live now.

  15. Does anyone know when the law will go into affect? I have to pay my “full” month in January because my 9 months ran out..called my company and they have no idea..said they would credit it back, but we need the money now…tried to call the dept. of labor;s number listed and it is not in service..

  16. As part of my severance package, my company agreed to cover my insurance until Dec 31, 2009, and I signed up for COBRA beginning January 1, 2010. My company is now advising me that although I am eligible for COBRA, I will NOT be eligible for the new subsidy because I didn’t start on COBRA immediately following my termination. This doesn’t sound right to me since the new deadline is Feb 2010. I can’t find any definitive answer to this type of situation and the Labor Dept line disconnects me after putting me on hold. Any guidance would be very much appreciated.

  17. I still have not seen an answer to Annie’s question. Has the time frame for Cobra coverage been extended from the 18 month original time frame? This has nothing to do with the Subsidy extension.Also , Is their any more hope of Medicare being offered to the Unemployed over the age of 62? Thanks

  18. I’m a single mother and was laid off July 31, 2009. I have been paying ridiculous premiums through COBRA since. I have been asking about the reduced premium and still haven’t received a response. I can no longer afford to pay for this insurance. It jumped from $754.05 a month to over $876.00. That’s more than one of my unemployment checks. I just don’t understand why I don’t qualify for the reduced rate. Why won’t anyone get back to me about this? It’s so aggravating.

  19. Does anybody have any idea regarding the extension (regardless of who pays) of 18 to 24 month or for people over 55 for cobra to be extended to medicare age. Would even like how and who you try and get in touch with to give an opinion. Would be happy just to get cobra extended for an extra 6 months even if I have to pay. Thanks for anyone who can give me advice.

  20. Anyone want to pay my monthly cobra bill? I’m a single mom & I just rec’d my new cobra bill it is $962.12 a month. 🙁 I’m so distressed right now, I can’t even think straight… I had the benefit of the reduced rate for 4 months.
    Praying to god that my 3 kids & I don’t become seriously ill before I find perm employment.

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