Congress Provides for COBRA Extension
At the beginning of 2009, employers, insurers and COBRA administrators revised their procedures and notices to implement the COBRA subsidy provided under the American Recovery and Reinvestment Act of 2009 (“ARRA”). These provisions allowed certain eligible individuals to elect COBRA coverage and pay only 35% of the COBRA premium for up to 9 months. Subject to certain exceptions, employers then collect the other 65% of the premium from the federal government through a credit claimed on the employer’s payroll tax return. This COBRA subsidy was a temporary measure that was to be available only to individuals who were involuntarily terminated from employment and were entitled to elect COBRA coverage on or prior to December 31, 2009. On December 19, 2009, President Obama signed the Department of Defense Appropriations Act, 2010, which includes an amendment extending the COBRA subsidy (the “Subsidy Amendment”).
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