American Recovery and Reinvestment Act
On December 19, 2009, Congress amended the American Recovery and Reinvestment Act of 2009 (ARRA) by extending the COBRA premium reduction eligibility period until February 28, 2010, and increased the maximum period for receiving the subsidy from nine to 15 months.
Individuals who are eligible for COBRA coverage because of their own or a family member's involuntary termination from employment that occurred from September 1, 2008 through February 28, 2010 and who elect COBRA, may be eligible to pay a reduced premium. Eligible individuals pay only 35 percent of the full COBRA premiums under their plans for up to 15 months. The employer (or other responsible entity) may recover the remaining 65 percent of the premium by taking the subsidy amount as a credit on its quarterly employment tax return. This premium reduction is generally available for continuation coverage under the Federal COBRA provisions, as well as for group health insurance coverage under state continuation coverage laws.
The attached FAQ document highlights some important questions about the impact the ARRA has on current COBRA policies and procedures. Additional information is available at the Department of Labor and IRS.
Please watch for future updates and notices from Blue Cross of Idaho as we work to notify our groups and members of these changes to COBRA policies and procedures.