COBRA Subsidies Finally at an End?

Remember those pesky COBRA subsidies? The federal COBRA subsidy, originally introduced in March of 2009, provided that 65% of the cost of COBRA health insurance premiums would be covered by the employer for up to 15 months. To be subsidy eligible, recipients must have originally become eligible for COBRA as the result of an involuntary termination of employment occurring between September 2008 and May 2010. Well, it is possible that they are coming to an end. The last group eligible recipients (those who began receiving assistance in May 2010) would cease to be subsidy eligible as of August 31, 2011. That means that if you still have former employees receiving subsidies for COBRA coverage, that should end as of next month. Also, there is presently no action from Congress pending to extend the subsidy further. Although there is no specific notice requirement, we recommend that if you have COBRA participants that are still receiving the subsidy, you provide them with some notice that their subsidy eligibility is coming to an end. Consider a simple notice that the subsidy period has expired and that they are now responsible for 100% of the COBRA premiums if they want to continue coverage.

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