On December 21, 2009, President Barak Obama signed a bill that will extend the original federal COBRA subsidy created by the American Recovery and Reinvestment Act of 2009 (ARRA), which the President had signed into law in February.

Under the ARRA, the federal government pays 65% of COBRA premiums for up to nine months for employees who were involuntarily terminated between September 1, 2008, and December 31, 2009. This subsidy was set to expire at the end of this year and has already started to end for individuals who have been receiving it since March.

WHAT THIS MEANS TO YOU AS AN EMPLOYER?
The legislation will extend:

• The total allowable time an individual could receive the COBRA subsidy by six months (from nine to 15 months); and,
• The subsidy to individuals who are involuntarily terminated between January 1, 2010, and February 28, 2010.

Additionally, the legislation will allow individuals whose subsidy periods already expired and who failed to pay their full unsubsidized premiums to retroactively pay them.

The legislation will also require employers to provide notice to all individuals who are COBRA beneficiaries on or after October 31, 2009, and all individuals whose employment is terminated on or after October 31, 2009. The notice must describe the new 15-month premium subsidy created by the legislation.

WHAT SHOULD I DO NEXT?
If you have any additional questions regarding the information within this eCommunication, please call Corporate Synergies at 1.866.CSG.1719 or CLICK HERE to contact us today.

Corporate Synergies is pleased to provide regular updates on issues affecting group benefits insurance. As an insurance broker and consultant, Corporate Synergies monitors federal and state legislative and regulatory activity to ensure that you stay informed.