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IMPORTANT COBRA SUBSIDY UPDATE
December 11, 2009
Important Updates:
- Involuntary Terminated Eligible Cobra Participants effective January 1, 2010 and thereafter are not eligible for Cobra Subsidy.
- Participants eligible for COBRA and State Continuation subsidies effective March 1, 2009 are reaching the end of their nine-month subsidy period effective November 30, 2009.
The American Recovery and Reinvestment Act provided eligible COBRA and state continuation participants with nine months of subsidized premiums. Participants who became eligible on March 1, 2009, received a 65 percent premium subsidy through November 30, 2009. They will be responsible for paying 100% of the premiums beginning in December 2009. For example, if a participant's subsidized premium was $105 in November 2009, that premium will increase to $300 for December 2009. This is a significant increase and may be unexpected for some participants who may have lost track of the nine-month end date.
Subsequent waves of the nine-month subsidy period will expire monthly thereafter as follows:
| Cobra Subsidy Effective Date | Cobra Subsidy Termination Date |
| March 1, 2009 | November 30, 2009 |
| April 1, 2009 | December 31, 2009 |
| May 1, 2009 | January 31, 2010 |
| June 1, 2009 | February 28, 2010 |
| July 1, 2009 | March 31, 2010 |
| August 1, 2009 | April 30, 2010 |
| September 1, 2009 | May 31, 2010 |
| October 1, 2009 | June 30, 2010 |
| November 1, 2009 | July 31, 2010 |
| December 1, 2009 | August 31, 2010 |
As an Employer, you may experience increased phone calls from these participants with concerns on whether or not these participants can afford to pay the increased premiums.
In the interim, the government is currently considering an extension of the subsidy beyond the program's December 31, 2009 end date. If there are any changes or an extension to the subsidy law, we will communicate that as soon as possible.
If you have any employees that approach you to discuss the cobra subsidy and increased premiums, please do not hesitate to have them contact us directly. We are more than happy to assist them to see if we can provide them with competitive individual medical quotes for consideration.
If you have any questions, please do not hesitate to contact Sherrie Zenter, Vice President in our Employee Benefits Department.