Yesterday President Obama signed the Defense Appropriations bill, which included a provision extending federal COBRA subsidies. Here’s how Phyllis Borzi, Assistant Secretary of the Employee Benefits Security Administration describes the provision:
The act extends the eligibility period for the ARRA premium reduction for an additional two months (through Feb. 28, 2010) and the maximum period for receiving the subsidy for an additional six months (from nine to 15 months). Millions of unemployed Americans and their families will be better able to afford and keep their health benefit coverage because of this new law.
Individuals who had reached the end of the reduced premium period before the legislation extended it to 15 months will have additional time to pay the reduced premiums related to the extension. To continue their coverage they must pay the 35% of premium costs by (60 days after date of enactment) or, if later, 30 days after notice of the extension is provided by their plan administrator.
We encourage you to subscribe to our COBRA Web site, www.dol.gov/cobra, to get information on new notice requirements, updated guidance, fact sheets, and frequently asked questions as they become available.
Individuals should contact their plan or health insurance provider for information regarding the extension under their health plan. If you need further assistance contact an EBSA Benefits Advisor toll-free at 1-866-444-3272.
This is particularly good new for low-income Massachusetts unemployed workers, who can add the federal 65% COBRA to their Medical Security Program (MSP) benefit, reducing their cost to just 7% of the premium. The funding will also save some costs in the MSP program. Three weeks ago we reported that our HelpLine has already received several calls from folks shocked to see their COBRA bill triple from last month.