Information is updated frequently. Please check back often!
COBRA Subsidy Announcement
Proposed COBRA Subsidy Amendment in Continued Indecision
TAMPA, FL 6/21/2010
The Jobs Bill only got 56 of the required 60 votes from the Senate to move forward with unemployment benefits. On June 9, 16 senators introduced a new amendment to the jobs bill that would reinstate the COBRA Premium Assistance Program through November 30. The proposed amendment came immediately after legislation passed prior to the Memorial Day recess, when the last extension of unemployed benefits expired.
Under pressure to decrease government spending, House leaders cut the unemployed health care subsidy including the 65% ARRA COBRA subsidy from H. R. 4213, the American Workers, State, and Business Relief Act of 2010. As of this writing, it appears it may not make it back into the bill.
The National Employment Law Project reports that without the COBRA premium subsidy extension, as many as 150,000 individuals and families will lose out each month on the subsidies necessary to afford quality health care. The number could grow to 1.2 million by the end of the month if Congress refuses to take action to reinstate the COBRA premium Assistance.
What is MANGROVE doing?
Mangrove continues to process COBRA notices under the ARRA extension for events prior to May 31. COBRA Election Notices will continue to have the ARRA language in the body of the letter to advise those with qualifying events of 9/1/2008 – 5/31/2010 of their ARRA eligibility. Participants who have qualifying event dates of 6/1/2010 or later will receive the same notice, even though their qualifying event date is 6/1/2010 or later will not qualify them for the subsidy. The processing of the ARRA certification form will continue to be scrutinized at the processing level to ensure only participants with QE dates 5/31/2010 or prior receive the subsidy, and those with QE dates 6/1/2010 or later will receive a denial letter.
What Should You Do?
- Continue to let Mangrove know if the qualifying events of Termination of Employment are 'voluntary' or 'involuntary' in case Congress decides to pass another retro version of ARRA, as the requirement for termination events will remain.
- Those terminated prior to May 31 may still be eligible for the subsidy for up to 15 months.
- Employees terminating on or after June 1 will be responsible for the full COBRA premium. Be prepared to let them know that the subsidy is no longer available and that Mangrove will let them know if things change.
Stay tuned for more changes.
Spring Break for Senate sans COBRA Subsidy Extension
TAMPA, FLORIDA, 3/29/2010 –
The Senate adjourned Friday for a two-week break without taking action on a House-approved bill that would temporarily extend federal COBRA health insurance premiums subsidies.
H.R. 4851, which contains proposed actions to temporarily extend certain other expiring federal programs, was stalled after Republicans and Democrats clashed on how the extensions would be funded.
The House-approved bill would extend the subsidy eligibility through April 30, 2010. Without the extension, employees who experience an involuntary qualifying event will cause them to lose benefits under the active plan after March 31, and will not be eligible for the 65%, 15-month premium subsidy.
However, the Senate is expected to take up the measure soon after legislators return on April 12. If the bill is approved, the premium subsidies would be retroactive to April 1. The Senate did approve H.R. 4213 that has provisions to extend the subsidy to employees laid off through the end of 2010, but the House has not yet acted on that measure.
Mangrove will continue to monitor the ongoing changes in Washington in regard to future legislation and continuously keep you updated once information becomes available. Should you have any immediate questions or concerns, please contact your Account Manager. Thank you.
COBRA Subsidy Extension Signed Into Law
On March 2, 2010, the U.S. Senate passed H.R. 4691, the Temporary Extension Act of 2010 by a vote of 78-19. This Senate action follows House passage of H.R. 4691 on February 25, 2010. The President immediately signed this bill into law on March 2, 2010.
The Temporary Extension Act:
1. Extends the COBRA subsidy program that was enacted under the
American Recovery and Reinvestment Act and
COBRA
The law’s COBRA provisions:
- Extend the eligibility period for the 15-month 65 percent premium
subsidy to those involuntarily terminated from March 1 through March
31, 2010.
- Allow employees to receive the subsidy if they first lost group coverage
due to a reduction in hours and then were terminated after enactment of
the bill.
Additional Extension
These “short-term” extensions of the COBRA subsidy and unemployment
benefits are intended to give Congress more time to consider legislation to
extend these programs through 2010. Under H.R. 4213, a bill the Senate is
currently debating, both the COBRA subsidy program would be extended
through December 31, 2010.
Mangrove will be making the necessary adjustments to COBRA Election
letters immediately to reflect the 3/31/2010 end date and continue to monitor
the changes.
ARRA Extension Approved by the Senate
On Saturday, December 19, 2009, the Senate passed HR 3326 (the Department of Defense Appropriations Act of 2010, DoDAA). The bill received bipartisan support and was approved by an 88-10 vote after the House had approved the measure three days earlier.
Under HR 3326, major changes to ARRA would include:
- Currently, ARRA eligibility for involuntary terminations of employment ends on December 31, 2009. This would be extended to February 28, 2010, without regard to when the COBRA coverage period actually begins.
- The maximum ARRA subsidy period, previously nine months, would be 15 months for all assistance eligible individuals (AEIs). This would include any AEIs whose subsidy expired November 30, 2009.
- Those whose ARRA subsidy ended on November 30, 2009, would have an extended grace period in which to pay their COBRA premium. The grace period would be extended until 60 days after the DoDAA is enacted or, if later, 30 days after a DoDAA notice is sent to them.
- Two new notifications would be required. First, plans would need to notify all individuals who were AEIs as of October 31, 2009, or later of the DoDAA changes. This notice would need to be sent within 60 days of DoDAA’s enactment date. A second notice would need to be sent to those AEIs who lost their ARRA subsidy to notify them of their extended payment grace period.
Another bill is pending, but the status and prospect for it to become law in current form are unclear at this time. The bill is HR 2847 (the Jobs for Main Street Act of 2010). The bill passed by a narrow 217-212 vote. Under HR 2847, major changes to ARRA would include:
- The ARRA eligibility period would be extended to June 30, 2010.
- The maximum ARRA subsidy period would be 15 months.
- Clarification is made that all reductions of hours followed by involuntary termination of employment would be subsidy eligible. This would expand the current rule under Notice 2009-27, which adopts an “in anticipation” standard.
To review the ARRA FAQ: click here.
The DOL has recently posted the process and forms to use if your ARRA application is denied and you would like the denial reviewed here.
Informational links from the Department of Labor:
FAQ regarding COBRA Premium Reduction
COBRA Subsidy Denials
Informational links from the Internal Revenue Service:
COBRA Premium Subsidy for Employers and Employees
Premium Assistance for COBRA Benefits Guidance of Law with Q & A
Informational links from the Centers for Medicare and Medicaid Services:
COBRA Continuation of Coverage Overview
