26-Jan-2010
By Philip Mueller, Esq.   On December 19th, 2009 the President signed the Department of Defense Appropriations Act of 2010 (DOD Act) into law. Included in the DOD Act was an amendment to the American Recovery and Reinvestment Act of 2009 (ARRA) that extends reductions in premiums for health benefits under COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985).   COBRA provides continuation of group health coverage offered at companies with twenty or more employees that otherwise might be terminated. The employee and his or her family members each have sixty days from the date of a qualifying event to elect COBRA coverage; otherwise, they lose all rights to COBRA benefits. It is important to know that benefits under COBRA are not free. However, for a limited time, under ARRA, eligible individuals pay only thirty-five percent of their COBRA premiums and the remaining sixty percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee’s employment.   The DOD Act extends the eligibility period for the COBRA premium reduction, which originally expired December 31, 2009, for an additional two months–through Feb. 28, 2010. The DOD Act also extends the maximum period for receiving the premium reduction for an additional six months–from nine to fifteen months. Individuals who had reached the end of the reduced premium period before the legislation extended it to fifteen months will now have additional time to enjoy the reduced premiums related to the extension. To continue their coverage they must pay the thirty-five percent of premium costs within sixty days after date of enactment or, if later, thirty days after notice of the extension is provided by their plan administrator.   More information for both employees and employers can be found at the U.S. Department of Labor link: http://www.dol.gov/ebsa/cobra.html. You may also call the Employee Benefits Security Administration at: 1-866-444-3272.   … Philip Mueller, Esq. closely follows developments in the health care industry. For five years he has compiled health care briefs that are distributed weekly to health insurance brokerages and employee benefits professionals to keep them abreast of industry trends, pending legislation, and current regulation. Mr. Mueller is the Davis Miles Pre-Paid Legal Division Transactional Practice Group Manager.