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.

In an unusual move, the House will consider the COBRA subsidy (and eligibility) extension as part of the House Amendment to the Senate Amendment to HR 3326 (the Department of Defense Appropriations Act, 2010).  The applicable provisions can be found  here as Section 1010 at page 153.

If enacted in its current form, the new COBRA subsidy would:

1. Change the end date of eligibility for the ARRA subsidy from December 31, 2009 until February 28, 2010
2. Expand the duration of the ARRA subsidy period from the current nine months to 15 months
3. Allow a period for the retroactive payment of COBRA premiums for Assistance Eligible Individuals (AEIs) whose subsidy period expired November 30.  This would apply to all who were initially eligible for the subsidy on March 1, 2009.  The retroactive period would be 60 days starting on the enactment of the new provision, or if later, 30 days after provision of a new notice to COBRA qualified beneficiaries.
4. Require a special Notice to all AEIs who are on COBRA on or after November 1, 2009 whose qualifying event is a termination of employment (whether voluntary or involuntary) occurring on or after November 1, 2009.  This new Notice would describe the new 15 month subsidy.
5. Lastly, if enacted as written the extension would modify the original ARRA subsidy and subsequent interpretation by DOL that both the involuntary termination date AND the loss of coverage must occur within the subsidy eligibility period.  The new provision would only require that the involuntary termination occur before February 28, 2010, regardless of when the COBRA coverage period was to begin.

Stay tuned for whether Congress passes the extension, and if this is the final form of such an extension.