08 Dec 2009

Employees terminated in December will not be eligible for COBRA subsidy

08 Dec 2009

The U.S. Department of Labor has provided clarification to the eligibility guidelines for the 65% COBRA under the current ARRA legislation.

Because employees of California small groups are typically covered through the end of the month in which they are terminated, they are not eligible for COBRA (or Cal-Cobra) until the first day of the following month.  For December terminations, that means January 1, 2010 — one day after the eligibility period for the subsidy expires.

The DOL points out that this is based on current legislation.  There is a pending bill in the Senate as well as a House counterpart, both of which would extend the eligibility period, and the length of the subsidy for new and current beneficiaries of the subsidy.

12/22/2009 UPDATE: President Obama has signed a bill extending the COBRA subsidy.  The eligibility period for laid-off employees is extended two months, to February 28, 2010.  The benefit period is extended six months (to a maximum of 15 total).  The extended benefit period applies to the newly qualified and to those who have been receiving the subsidy under the original legislation.  Story here, from the WSJ.

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