COBRA Subsidy Extended….Again!
The COBRA subsidy law has been temporarily extended, once again (H.R. 4851, signed by President Obama on April 15, 2010). This is the law that allows individuals involuntarily terminated from employment to pay 35% of the COBRA premium for up to 15 months.
In summary, an involuntary termination of employment occurring on or before May 31, 2010 will qualify an individual for the subsidy. This includes individuals involuntarily terminated after March 31, 2010 and before this new extension was enacted. Generally all other provisions of the law remain in force.
There are several bills in Congress that would contemplate extending the law further. Stay tuned for future developments.
In the meantime, individuals experiencing a qualifying event after March 31st should be provided with a COBRA notice that includes subsidy information.
Based on past experience, it is likely that the Department of Labor will develop model notices to be used for this purpose.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.
As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.