COBRA Updates Archive
Temporary Extension Act of 2010
On Tuesday, March 2, 2010, President Obama signed into law the Temporary Extension Act of 2010, which further extends the COBRA and mini-COBRA subsidy eligibility period by one month, to March 31, 2010. Additionally, the legislation includes new requirements related to certain individuals who have a reduction in hours followed by an involuntary termination of employment.
As previously noted, accounts subject to COBRA should continue to work with their own legal counsel to determine how this new legislation may affect them.
Small groups subject to mini-COBRA* that have an employee who has a qualifying event from March 1, 2010 through March 31, 2010, should use the updated notices below. As a reminder, groups have 14 days from the date of a qualifying event to send a mini-COBRA election notice to a qualified beneficiary.
Important UpdateARRA, as amended by the Temporary Extension Act of 2010, now makes the mini-COBRA subsidy available to a new subset of involuntarily terminated employees who were not previously eligible for the subsidy. Specifically, individuals who had a reduction in work hours from September 1, 2008 through March 31, 2010 (resulting in a loss of coverage and an offer of mini-COBRA), followed by an involuntary termination of employment from March 2, 2010 through March 31, 2010, are now eligible for the subsidy.
Within this subset of employees who had a reduction in work hours followed by an involuntary termination, some may have elected mini-COBRA (and are currently paying the full premium) at the time of their reduction in work hours. Others may have declined mini-COBRA or elected it but subsequently dropped the coverage. At the time these individuals had an involuntary termination of employment from March 2, 2010 through March 31, 2010, they may or may not have already been receiving mini-COBRA. Those that did not have mini-COBRA at the time of the involuntary termination of employment must now be offered the right to elect mini-COBRA coverage and the subsidy. Those that were already receiving mini-COBRA (at the time of their involuntary termination) must be offered the subsidy.
Employers are responsible for sending notices to these individuals, so that they can elect mini-COBRA and/or the subsidy. To help you, we have developed the following notices for your use:
Please note that these notices must be sent to these individuals within 60 days of the date of the individual's involuntary termination of employment that occurred from March 2, 2010 through March 31, 2010. The effective date of mini-COBRA and/or the subsidy is based on the date of the involuntary termination of employment, not the date of the reduction in work hours. However, the length of time the mini-COBRA (18 months) or the subsidy (15 months) lasts must be measured from the date of the reduction in work hours.
Example: XYZ Company offers Blue Cross Blue Shield of Massachusetts health coverage only to employees working 30 hours or more per week. John Jones worked 40 hours a week and was enrolled in the plan. But on January 1, 2010, his work hours were reduced to 20 hours per week and, as a result, he lost health coverage. XYZ Company offered him mini-COBRA coverage at the full premium, but he declined the coverage. Then on March 15, 2010, John Jones' employment was involuntarily terminated. Under the new ARRA provisions, John must be offered mini-COBRA and the subsidy to begin immediately after his termination on March 15, 2010. XYZ Company sends him the Mini-COBRA Continuation Coverage New Election Period and Subsidy Notice above. The notice indicates that coverage only lasts until approximately June 30, 2011 (18 months from January 1, 2010). The subsidy only lasts until about March 31, 2011 (15 months from January 1, 2010).
If you have any questions, please contact your account service representative.