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Attorneys

LAW ALERT: The COBRA Subsidy Will End November 30, 2009 For Some Beneficiaries

November 3, 2009

The sixty-five percent (65%) COBRA premium subsidy provided for in the American Recovery and Reinvestment Act of 2009 (ARRA) will come to an end on November 30, 2009 for some qualified beneficiaries.

By way of background, the ARRA created the COBRA subsidy for those qualified beneficiaries who were “involuntarily” terminated (including not just layoffs but also poor performance terminations) from their employment between September 1, 2008 and December 31, 2009, and provided for a 65% premium subsidy for up to nine (9) months. The first date of the subsidy under the ARRA was March 1, 2009. Therefore, for those qualified beneficiaries who received the subsidy as of March 1, 2009, their nine months expires November 30, 2009. Qualified beneficiaries who became eligible subsequent to March 1, 2009 will have the applicable nine month period following the beginning date of their subsidy payments.

What Should Employers and/or Plan Administrators Do?

Provide beneficiaries with sufficient notice prior to the expiration of their COBRA subsidy. The notice should advise them of the date the subsidy will expire and also provide them with the amount of COBRA premiums they will be responsible for during the remainder of the COBRA period in order for COBRA coverage to continue.

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Lizbeth “Beth” West is a shareholder in the Labor and Employment Law Section and Disputes, Trials & Appeals Section at Weintraub Genshlea Chediak. Beth’s practice focuses on counseling employers in all areas of employment law, and defending employers in state and federal court, as well as before administrative agencies. She has extensive experience in defending wage and hour claims, and complex whistle-blowing and retaliation claims. She also provides training services on various employment issues, such as sexual harassment and violence in the workplace. If you have any questions about this Legal Alert or other employment law related questions, please feel free to contact Beth West at (916) 558-6082. For additional articles on employment law issues, please visit Weintraub’s law blog at www.thelelawblog.com.