Obama Includes Another COBRA Subsidy Extension in Budget

The Obama administration proposed another extension of COBRA premium subsidy benefits on Monday, according to Business Insurance. President Barack Obama included this latest extension in his proposed federal budget for the fiscal year 2011. The proposed extension would reportedly extend the 65 percent premium subsidy to individuals whose employment is terminated between March 1, 2010, and December 31, 2010, and those individuals would be eligible for the subsidy for up to 12 months.

The American Recovery and Reinvestment Act of 2009 (ARRA), which President Obama signed into law last February, created the original federal COBRA subsidy. Under the ARRA, the federal government paid 65 percent of COBRA premiums for up to nine months for employees who were involuntarily terminated between September 1, 2008, and December 31, 2009.

If Congress approves the new COBRA subsidy extension found in the proposed budget, it will be the second extension of the COBRA subsidy program created by the ARRA. The COBRA subsidy was previously extended in December 2009 after the President signed the Department of Defense Appropriations Act, 2010 (H.R. 3326) into law. This Act included a provision that extended:

  • the subsidy to individuals who are involuntarily terminated between January 1, 2010, and February 28, 2010; and
  • the total allowable time an individual could receive the COBRA subsidy by six months (from nine to 15 months).

The President isn’t the only one contemplating another extension of the federal COBRA subsidy. The U.S. House of Representatives recently passed a major appropriations bill with a provision that would extend the COBRA premium subsidy to individuals who are involuntarily terminated through June 30, 2010. The U.S. Senate is also expected to include a COBRA subsidy extension in a jobs bill that it will reportedly unveil soon.
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