Important ARRA Update
Recent questions have prompted us to provide a reminder that November 2009 is the first month that the ARRA subsidy will terminate for any active COBRA participant who elected COBRA and was deemed eligible for the 65% employer subsidy as of March 1, 2009. Although Congress is proposing an extension WageWorks wanted to be sure that at this time no extension has been approved.
In addition, IRS COBRA Notice 2009-27 indicates that both the involuntary termination and eligibility for COBRA continuation coverage must occur between 9/1/08 and 12/31/09 for an individual to be eligible to be covered as an Assistance Eligible Individual (AEI). Under the current statute, if a loss of coverage takes place after 12/31/09, the individual cannot be covered as an AEI and will not be eligible to receive the 65% COBRA premium assistance subsidy.
Congress has introduced a number of bills that could extend the original ARRA subsidy for qualified individuals under COBRA. While there are varied approaches, here are some of the potential changes:
The Senate bill would also extend the subsidy to those whose hours were reduced to the point that they were no longer eligible for coverage
None of the bills have passed yet; however, we do anticipate that some level of extended ARRA subsidy coverage may be approved.
The House Bill H.R. 3962, for Health Care Reform, which did pass on 11/7/09, did extend the length of time anyone on COBRA continuation can be covered until the “Exchanges” are available, which is expected in 2013. Again, while this bill has passed in the House, it is not yet law.
We will keep you all informed, in an effort to be prepared to handle any and all changes that take place, when the final legislation is passed.
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