The Employee Benefits Security Administration has released a batch of answers to questions about the new benefits continuation subsidy extension.
The extension, included in H.R. 3326, a defense appropriations bill that President Obama signed into law earlier this month, affects worker access to Consolidated Omnibus Budget Reconciliation Act health coverage continuation benefits.
Originally, departing workers could get COBRA continuation coverage only if they could pay 102% of the cost of the premiums. Earlier this year, Congress put a provision creating a temporary, 9-month COBRA continuation benefits subsidy in the American Recovery and Reinvestment Act of 2009. The ARRA 9-month subsidy program was set to expire Dec. 31.
Now, eligible, involuntarily terminated workers and their dependents can apply for the 65% federal subsidy up until Feb. 28, 2010, and they can get the subsidy for up to 15 months.
Individuals who ran out of COBRA subsidy benefits before Congress extended the benefit period to 15 months can get their coverage back by paying their 35% share of the premium costs by Feb. 17, 2010, or, if later, 30 days after notice of the extension is provided by their plan administrators, EBSA officials write.
Elsewhere in the guidance, EBSA officials write that:
– Plan administrators must send notices to individuals who may be eligible for the new subsidy extension by Feb. 17, 2010, even if those individuals already have been notified about the original COBRA subsidy program.
- Employers that offer multiple health plan options can let individuals who are eligible for the COBRA subsidy shift to different, lower-cost plan options but cannot let them shift to higher-cost options. “The different coverage cannot be coverage that provides only dental, vision, a health flexible spending account, or coverage for treatment that is furnished in an on-site facility maintained by the employer,” officials write.
- The COBRA subsidy extension comes with income limits.
The subsidy phases out for individuals who earn $125,000 to $145,000 and married couples that earn $250,000 and $290,000. Individuals who earn more than $145,000 and couples that earn more than $290,000 are not eligible for the subsidy.
“Individuals may permanently waive the right to premium reduction but may not later obtain the premium reduction if their adjusted gross incomes end up below the limits,” officials write.