Subsidy Extended to March 31, 2010
House has confirmed that President Obama signed H.R. 4691, known as the
"Temporary Extension Act of 2010" into law on Tuesday, March 2, 2010.
The bill takes effect immediately.
Prior to the
enactment of this bill, COBRA premium assistance was not available to anyone
terminated after Feb. 28, 2010 due to the expiration of the previous extension.
The Temporary Extension Act of 2010 will immediately allow those who
experience an involuntary termination of employment through March 31, 2010
to be treated as an assistance-eligible individual for purposes of the COBRA
The law also
changes the eligibility to receive premium assistance for those who have
experienced a reduction in hours followed by a termination of employment. In
order to be considered an assistance-eligible individual, an employee must have
experienced a reduction in hours between Sept. 1, 2008 and March 31, 2010.
However, the termination of employment must have occurred on or after March 2,
affected by both 1) a reduction of hours between Sept. 1, 2008 and March 31,
2010 and 2) termination of employment on or after March 2, 2010 are required to
receive a notice informing them of the opportunity to apply for the subsidy.
The application for the subsidy must be completed by the later of May 1, 2010,
30 days after the notice was provided to the former employee, or by the end of
the applicable grace period. The law also clarifies that no payment is required
for COBRA coverage between the reduction in hours and the involuntary
termination of employment.
The law also
authorizes the Secretary or an affected individual to bring a civil action
against the plan sponsor or health insurance issuer, as well as assess a
penalty up to $110 per day for failure to comply within 10 days of a
determination of eligibility as an assistance eligible individual.
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