On April 15, 2010, Congress passed and the President signed into law the Continuing Extension Act of 2010 (HR 4851).  Under the provisions of the Act, the 65 percent federal COBRA premium subsidy is extended to qualifying individuals who are involuntarily terminated between April 1, 2010 and May 31, 2010 inclusive.  Thus, the subsidy is again available for up to 15 months to these newly-qualifying employees.

Still pending in Congress is HR 4213, which would extend the federal COBRA subsidy program to all who are involuntarily terminated through 2010.

After Senator Jim Bunning finally allowed the rest of the Senate to act, it quickly passed a one month extension of the COBRA subsidy. The extension now applies for up to 15 months to all employees involuntarily terminated between March 1, 2010 and March 31, 2010.  These individuals will qualify for the 65% federal subsidy for COBRA for up to 15 months.

A longer term extension is being considered in the Senate that would expire on December 31, 2010.  Stay tuned.

Late Saturday night (December 19th), the Senate passed the Department of Defense Appropriations Act, which contained in Section 1010 an extension of the COBRA subsidy first introduced in 2009′s ARRA stimulus bill.  Thus, Congress has passed, and the President is expected to sign, the extension of the COBRA subsidy.

There are a number of significant changes made to the original COBRA subsidy:

1. The date by which an Assistance Eligible Individual (AEI) was required to be involuntarily terminated was extended from December 31, 2009 to February 28, 2010.
2. In a significant change from the original, the loss of health coverage by the end date of the subsidy is no longer required.  Under the original law and its interpretation by the Department of Labor, not only did the involuntary termination have to occur before December 31, 2009 (now February 28, 2010), but the AEI also had to lose health coverage prior to that date.  Now, the date of involuntary termination ONLY will be determinative for eligibility for the subsidy.
3. The maximum duration of the COBRA subsidy is extended from nine months to 15 months.
4. AEIs who dropped COBRA coverage because of the end of the original subsidy must be given the opportunity to reinstate coverage retroactively once they are notified of the new extension provisions and pay their portion of the applicable COBRA premium.
5. There is a new notice requirement for those AEIs who lost or elected not to continue COBRA coverage after their subsidy expired.  There is also a new notice for all terminated employees (whether voluntary or involuntary) on or after October 31, 2009 incorporating the changes from the Defense Appropriations Act changes.  It is expected that new regular COBRA event notices will begin incorporating the new notice requirements in very short order.