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By signing the Continuing Extension Act of 2010 (the
"Act") into law on April 15, 2010, President Obama has
once again extended the eligibility period for the COBRA premium
subsidy.
As we reported in our earlier Alert,
"COBRA Premium Subsidy Extended Once Again", the
65-percent COBRA premium subsidy was previously extended through
March 31, 2010. The Act once again extends this eligibility period
for an additional two months, now through May 31, 2010. In light of
the Act, the definition of "assistance eligible
individual" now covers a qualified beneficiary who was
involuntarily terminated during the period from September 1, 2008,
through May 31, 2010, and who elects the COBRA continuation
coverage. An involuntary termination of employment that occurs on
or after March 2, 2010, but by May 31, 2010, and follows a
qualifying event that was a reduction of hours that occurred at any
time from September 1, 2008, through May 31, 2010, is also a
qualifying event. However, the Act did not change the maximum
period for receiving the subsidy, which remains at 15 months.
For individuals who experienced a termination of employment on
or after April 1, 2010, but before April 16, 2010, the Act requires
the plan administrator to notify such individuals by June 15, 2010,
of their rights and to allow them to elect COBRA
coverage—taking into account the premium
subsidy—up to 60 days after they are provided with such
notice.
The Act extends the COBRA premium subsidy once again. Employers
with participants who experienced a qualifying event on or after
April 1, 2010, but before April 16, 2010, may want to ensure that
the proper notices are being provided.
About Duane Morris
Duane Morris assists employer and plan administrator clients in
fulfilling their obligations under COBRA and other employee
benefits-related laws. The firm will continue to monitor this topic
and provide updated Alerts accordingly.
If you have any questions about this Alert,
please contact any of the attorneys in our Employment, Labor,
Benefits and Immigration Practice Group or the attorney in the firm
with whom you are regularly in contact.
This article is for general information and does not include
full legal analysis of the matters presented. It should not be
construed or relied upon as legal advice or legal opinion on any
specific facts or circumstances. The description of the results of
any specific case or transaction contained herein does not mean or
suggest that similar results can or could be obtained in any other
matter. Each legal matter should be considered to be unique and
subject to varying results. The invitation to contact the authors
or attorneys in our firm is not a solicitation to provide
professional services and should not be construed as a statement as
to any availability to perform legal services in any jurisdiction
in which such attorney is not permitted to practice.
Duane Morris LLP, a full-service law firm with more than 700
attorneys in 24 offices in the United States and internationally,
offers innovative solutions to the legal and business challenges
presented by today's evolving global markets.
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