By: Kevin M. Mosher, Esq.

After one Senator's opposition crumbled Tuesday afternoon, the Senate passed and the President signed into law a bill that amended the American Recovery and Reinvestment Act of 2009 (ARRA) extending the COBRA subsidy, which had expired February 28, from March 1, 2010 through March 31, 2010. In addition to the extension, the bill amends the definition of who is a qualified employee for the subsidy benefits (see below). Employers should be aware that this bill is seen by many as a stop-gap measure while Congress negotiates and drafts a longer-term subsidy for qualified employees.

What does this temporary extension do?

It allows qualified employees involuntarily terminated between March 1 and March 31 to be eligible for the 65% subsidy on their group medical insurance premiums should they elect COBRA.

What is different about this bill?

The COBRA subsidy program has been no stranger to companies this past year. However, new in this bill is an expansion of who might be qualified for the subsidy - i.e. the bill amends the ARRA to change the definition of who is a "premium assistance eligible individual." Under this revision employees who previously lost their group medical insurance coverage because of a reduction in hours (whether they failed to make or made but then discontinued the election of COBRA) and then were involuntarily terminated after this bill was enacted, qualify for the subsidy.

If you have any questions about the COBRA subsidy extension or any other benefit-related matters, please contact Attorney Kevin Mosher at (952) 746-1700 or kemosher@wesselssherman.com.