COBRA Obama Subsidy Extension Ending May 31, 2010

Extended Subsidy Eligibility Period

As of June 8th, 2010 there is no word yet on if there will be an extension of the cobra subsidy eligibility period or and extension of the benefits period. updates can be found on the department of labors website www.dol.gov/cobra .

On April 15, President Obama signed a bill that provides a two-month extension of the COBRA premium subsidy (through May 31, 2010). Originally, the bill called for a one-month extension (through April 30, 2010), however, during the debate, the Senate adopted an amendment offered by Finance Chairman Max Baucus, which further extended a number of provisions in the bill, including the COBRA premium subsidy. It is very unlikely that Congress will continue this approach -

Many did believe there was Congressional support for extending the premium subsidy eligibility period again, and dont expect consideration of the issue in coming weeks due to the recent passing of the health care reform bill.

Our hope is that an extension will be passed before the eligibility period ends next Monday, to avoid another retroactive benefits period

Either way, we will endeavor to keep you informed as changes occur.

This is some added relief for those who are currently on the ARRA COBRA Subsidy or may soon be on the Subsidy. If you don't qualify for the subsidy you can run a quote for your own plan at www.infinityhealthinsurance.com Here you will be able to run quotes from carriers like BCBS, Aetna, Humana, Assurant and United Health Care all at the same time. Even though we specialize in Illinois health insurance quotes, the website www.infinityhealthinsurance.com will still let you run quotes in for your state.

Legislation Details
The extension legislation provides for the following benefits:

• Extends the period of the 65 percent COBRA subsidy from nine months to 15 months. With the average COBRA cost for families costing $1400, this means an additional 6 months of $910 worth of government subsidy. For a total of $13,650.
• Establishes a transition period that applies to individuals who lost subsidies before the effective date of the new Act because they received the maximum number of months of subsidies under the original subsidy provisions.
• Establishes new notification requirements by group health plans or other entities.Details of this have not been released yet.
  
• Clarifies that eligibility and notice requirements for the subsidy are based on eligibility for COBRA due to loss of coverage because of qualifying event (involuntary termination of employment), both of which must occur during the eligibility period. People that have left a job on their own do not qualify for any subsidy.
  
• Becomes effective as if included in the original COBRA subsidy provisions of the American Recovery and Reinvestment Act.

The action allows workers who have used up their original nine months eligibility to receive six more months of the 65 percent subsidy, and those who did not choose to continue with COBRA coverage once they timed out to rejoin the system, pay premiums retroactively and receive the subsidy and maintain COBRA continuation. Workers who are involuntarily terminated through February 28, 2010, can now qualify to begin the subsidy and receive it for 15 months. It also means that workers terminated after February 28, 2010, will not qualify unless Congress takes further action.

These new changes in the premium subsidy program will also apply to those who are not eligible for COBRA, but instead are eligible only for state continuation coverage.

The original federal subsidy, included as part of the American Recovery and Reinvestment Act, provided a 65 percent premium subsidy starting in March to those who involuntarily lost a job in September 2008 or afterward, and was only scheduled to be available to workers who lost their jobs through the end of this year.

The unemployed who started receiving the subsidy when it was first available in March saw it lapse on December 1, and employees losing their jobs after December 31 were not eligible for the federal help without this Congressional action extending the benefits.

Further Evaluation Under Way
Evaluation of the extension and all the requirements, time frames, notifications, and details about retroactive premium payments is under way and more information will be coming as soon as it is available.

Several other bills are pending in both the United States House of Representatives and the Senate that would further extend the premium subsidy or make other changes to the current law or these newly passed provisions. They are also being watching closely for impact.