Yet Another COBRA Subsidy Extension Requires Immediate Employer Action

Benefits Brief
May 6, 2010

The Continuing Extension Act of 2010 enacted at the end of April has extended the limited government subsidy of COBRA continuation coverage yet again. As our readers will recall, the subsidy was originally enacted as part of the American Recovery and Reinvestment Act (ARRA) and last extended in March. The subsidy, generally equal to 65% of the cost of COBRA coverage for 15 months, is now available for employees and their eligible dependents who lost or will lose coverage due to an involuntary termination of employment from September 1, 2008 through May 31, 2010 (rather than through March 31, 2010). The Department of Labor (DOL) has issued another set of model notices that employers can use to satisfy the various reporting obligations that result from this latest extension, including updated General and Alternative Notices, which are described in our earlier advisories of March 27, 2009, January 22, 2010 and March 25, 2010. The model notices are available on the DOL website.