On  December 19, 2009, President Obama signed the Department of Defense Appropriations Act, 2010 (DDAA) into law.  The DDAA amends the American Recovery and Reinvestment Act of 2009 (ARRA) increasing the maximum COBRA subsidy period from nine months to fifteen months.  In addition, the eligibility period is extended by two months to February 28, 2010.

These changes are retroactive to the date ARRA was enacted, and impact all Assistance Eligible Individuals (AEIs) who experienced a COBRA-qualifying loss of employment on or after October 31, 2009, including individuals whose COBRA subsidy period ended December 31, 2009, as well as individuals who were not eligible for the subsidy because they did not qualify for COBRA until January 1, 2010.

What does this mean to you?

Notices of the extension rights must be sent to all AEIs.  This includes AEIs who discontinued COBRA coverage when their original 9-month subsidy period ended and those who continued to pay for coverage at the full COBRA rate.  These individuals are now permitted to elect to continue COBRA coverage at the subsidized rate retroactive to the date their subsidized coverage previously ended.

Employers have until February 17, 2010 to provide this notice.  It is not clear, but it appears (and is expected) that the Department of Labor has 30 days from passage of DDAA to release new model notices complying with the law change.  Visit our web site for periodic updates regarding the new model notices.

For more details on the COBRA premium subsidy extension, contact Cowden Associates at 1.888.889.9432 or visit the Department of Labor's web site.