COBRA Subsidy Extension Through March 31

The American Recovery and Reinvestment Act of 2009, as amended by the Department of Defense Appropriations Act, 2010, offers a premium subsidy to certain COBRA-eligible employees who were involuntarily terminated between September 1, 2008 and February 28, 2010. On March 2, 2010 the Temporary Extension Act of 2010 extended eligibility for the subsidy to employees who were involuntarily terminated between September 1, 2008 and March 31, 2010.

In addition, the Temporary Extension Act changed the federal COBRA law for certain eligible individuals who did not make a COBRA election on the basis of a reduction in work hours that occurred at any time from September 1, 2008 through March 31, 2010 (or who made such an election but discontinued it) and who subsequently were involuntarily terminated during the period from March 2, 2010 through March 31, 2010. Such individuals are entitled to a special 60-day period to elect COBRA coverage beginning on their employment termination date. If such an individual elects COBRA coverage, he or she is entitled to pay reduced COBRA premiums for up to 15 months or, if shorter, his or her maximum COBRA period. The maximum COBRA period (generally 18 months) will be counted from the date of the reduction in hours (not the subsequent employment termination date).

For more information regarding the COBRA subsidy, please see our previous updates, "COBRA Subsidy Extension Update — Updated Model COBRA Forms," "COBRA Subsidy Extended," "COBRA Subsidy Update: New COBRA Forms," and "New Federal Government Program: COBRA Subsidies."

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