COBRA News & Updates IMPORTANT:
PRESIDENT OBAMA SIGNS COBRA SUBSIDY EXTENSION
In a greatly anticipated move, President Obama approved the COBRA premium subsidy extension on Monday, December 21, 2009. In swift moving legislation, the House first approved the extension on December 16, 2009, and the Senate followed suit just three days later. The new legislation extends the COBRA subsidy’s eligibility period for two months and extends the maximum duration of the federal assistance to 15 months. The federal COBRA extension will apply for employees who are involuntarily terminated on or before February 28th, 2010. This slight change in terminology addressed the Congressional oversight in the original bill where only those who became eligible for COBRA coverage on or before 12/31/2009 were eligible. COBRA beneficiaries currently receiving the subsidy will be permitted an additional six months of subsidized coverage.

Beneficiaries whose subsidy already expired will be given the opportunity to receive retroactive coverage. For instance, a COBRA participant whose nine months of subsidized coverage ended on November 30th, 2009, will be allowed to pay the subsidized premium in January, 2010, in order to receive coverage for December.

P&A is currently working to create new COBRA notices that describe the 15-month premium subsidy. We had predicted an extension of the subsidy and updated our system to accommodate possible changes. We are in the process of converting all of our ARRA adjustments in the system to reflect the newly extended ARRA end date as well as the new January rates.

As your benefits administrator, P&A Group feels it is important to provide you with up-to-date information. As the new legislation moves forward, P&A is here and ready to guide you through any changes that take place. If you have any questions, please call customer service at (800) 688-2611. Customer service hours are Monday- Friday 8:30 am- 8:00 pm EST.

COBRA extension highlights:

• Individuals experiencing an involuntary termination occurring on or before 2/28/2010 are now subsidy- eligible. This slight change in terminology addressed the Congressional oversight in the original bill where only those who became eligible for COBRA coverage on or before 12/31/2009 were eligible.
• The ARRA subsidy is now extended from nine months to fifteen months. Individuals whose subsidy has already expired can receive an additional six months of federal assistance.
• Individuals who were first subsidy- eligible on 3/1/2009 had their subsidy end on 11/30/2009. As a result, these individuals were invoiced with the full premium rates for the month of December. Under the extension, those who paid the full premium will be issued refunds. Payments received in January for December benefit periods will be honored. P&A will issue revised bills for those individuals who have not yet paid.
• P&A has held back our January invoices in anticipation of a subsidy extension. January invoices will be sent as soon as the December invoices are re-billed.
• Communications will be sent to individuals whose subsidy ended on 11/30/2009 explaining the COBRA extension, as well as to all current and future COBRA continuants. Our attorney is currently working on the language for these pieces.