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ARTICLE · 31 MARCH 2010

COBRA Subsidy Gets (Another) Extension

Nutter McClennen & Fish LLP
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President Obama has signed into law the Temporary Extension Act of 2010, extending the period of time during which participants may become eligible for the COBRA subsidy and broadening the definition of involuntarily terminations that make a participant eligible to claim the subsidy.

United StatesEmployment and HR
Nutter McClennen & Fish LLP'S Benefits Practice Group
Nutter McClennen & Fish LLP'S Benefits Practice Group
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Originally published March 10, 2010

President Obama has signed into law the Temporary Extension Act of 2010, extending the period of time during which participants may become eligible for the COBRA subsidy and broadening the definition of involuntarily terminations that make a participant eligible to claim the subsidy. The new law did not alter the maximum period of fifteen months during which an eligible participant can receive the subsidy.  

The COBRA subsidy enables an "assistance eligible individual" (AEI) who pays 35% of the COBRA premium for health coverage continuation to have the remaining 65% paid by the coverage provider for up to fifteen months, who is then reimbursed through a tax credit. AEIs were initially limited to employees (and their beneficiaries) who became eligible for COBRA continuation coverage due to an "involuntary termination" of employment between September 1, 2008 and December 31, 2009. In December 2009, the period was extended to

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