Professional Service Agreement

COBRA Subsidy Extended Again

April 28, 2010

Congress has passed the Continuing Extension Act of 2010, which extends the COBRA subsidy eligibility period to include individuals who are voluntarily terminated on or before May 31, 2010. The subsidy covers 65% of the cost of COBRA health insurance continuation coverage and applies to employers with 20 or more employees. The subsidy is available for up to 15 months following the loss of group health coverage.

Previously, Congress extended the subsidy eligibility period to March 31, 2010, but failed to further extend the deadline prior to the March 31 expiration. The Extension Act extends eligibility retroactively, so individuals involuntarily terminated after March 31, 2010 are now eligible to receive the subsidy. The Act requires employers to notify these former employees regarding their eligibility for the subsidy. Employers will continue to be reimbursed for premium payments though payroll tax credits.

SESCO has authored and published a COBRA Administrative Manual to assist you in complying with Cobra and stimulus Continuation requirements. You may order the manual from our website by clicking here or by phone at the number listed below.