Congress Extends COBRA Premium Subsidy to Cover Involuntary Terminations Through May 31, 2010
On April 15, 2010, President Obama signed the Continuing Extension Act of 2010 (H.R. 4851) ("CEA") into law. The CEA extends the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") premium subsidy program to cover involuntary terminations through May 31, 2010. Employers subject to the COBRA (and state continuation coverage laws) will be subject to these new requirements.
Effective Date
The extension of the COBRA premium subsidy to May 31, 2010 is effective immediately. The prior COBRA premium subsidy applied to individuals involuntarily terminated between September 1, 2008 and March 31, 2010.
Next Steps
To date, every time the premium subsidy program has been extended, the Department of Labor ("DOL") has provided revised general COBRA notices to alert qualified beneficiaries of potential rights under the program. At a minimum, employers should expect that they will be required to provide updated notices to individuals in the following two groups:
- Employees who were involuntarily terminated since April 1, 2010. It appears this notice will permit a retroactive election and a 60-day period within which to elect coverage.
- Individuals who experience a qualifying event (of any type) on or after April 1, 2010 but prior to May 31, 2010.
The DOL has acted quickly in the past to provide updated model notices. We anticipate they may provide updated notices and related guidance in the next few weeks.
Click here to access a copy of the new law.
Click here to access the COBRA Premium Reduction Fact Sheet.More Paperwork, More Complexity
The Galen Institute
Massachusetts is our canary in the coal mine for health reform. As a harbinger of things to come, here is a link to the form that all Massachusetts residents must file with their state income taxes to verify that they have health insurance. And this is a state form! Imagine how much more complicated it will be when the federal government does this with the unbelievable number of income categories, insurance requirements, subsidy levels, and other complexities in the health overhaul law!
1965, when Congress created Medicare and Medicaid, the bill was 137 pages long. When the Mayo Clinic counted the number of pages of regulations governing the two programs about 30 years later, they found 130,000 pages of rules they must comply with. Do the math: One THOUSAND pages of regulation for every page of legislation? How is implementation of this new overhaul law even possible?
Finally, check out this Health Reform Map, created by Deloitte Development LLC, titled "Simplifying Complexity"
