About Premium Assistance

The American Recovery and Reinvestment Act (ARRA), as amended by Section 1010(a) of the Department of Defense Appropriations Act, 2010, provides a 65% reduction in the premiums payable by involuntarily terminated workers and their families for health care continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 (COBRA). This premium reduction can potentially last for up to 15 months. Workers who have been involuntarily terminated during the period from September 1, 2008 through February 28, 2010 and their families are eligible.

Under the ARRA, COBRA Continuation Coverage is defined as continuation coverage provided pursuant to ERISA (generally for private sector employers with 20 or more employees), the Public Health Service Act (for non-federal governmental employers with 20 or more employees), Title 5 of the US Code (for federal employees) or under a State program that provides comparable continuation coverage (generally covering private employers with fewer than 20 employees). These State programs generally are referred to as State mini-COBRA programs. However, please note that not every State mini-COBRA program satisfies the comparability requirement under the ARRA. In those states where the State mini-COBRA program does not provide comparable continuation coverage, the premium assistance subsidy is not available to terminated employees at private employers with fewer than 20 employees.

Those individuals who experienced an involuntary loss of employment in the period from September 1, 2008 to February 16, 2009, and did not elect continuation coverage in the initial 60 day election period, or elected coverage but later dropped it, will have a second chance to elect COBRA and receive the premium reduction. Please note however that the subsidy cannot be paid for any period before February 17, 2009. Moreover, under the State mini-COBRA programs, this special election period is available only if the State has taken action permitting the additional period.
The following website links provide additional information about COBRA continuation coverage and the potential availability of the premium subsidy assistance.

Specific Agency Guidance on COBRA and the ARRA Premium Reduction Provisions

Department of Labor

DOL Fact Sheet For Employees About COBRA Premium Reduction

http://www.dol.gov/ebsa/newsroom/fsCOBRApremiumreduction.html


DOL Fact Sheet for Employers About COBRA Premium Reduction

http://www.dol.gov/ebsa/newsroom/fsCOBRApremiumreduction.html        


DOL Statement on Review of COBRA Subsidy Denials

http://www.dol.gov/ebsa/subsidydenialreview.html

IRS

IRS Information Page on COBRA Premium Subsidy

http://www.irs.gov/newsroom/article/0,,id=204505,00.html


IRS Notice 2009-27 Providing Guidance on Premium Assistance for COBRA Benefits

http://www.irs.gov/pub/irs-drop/n-09-27.pdf

[PDF] Size: 82KB

Other

House Committee on Ways and Means FAQs on the COBRA Premium Reduction

http://waysandmeans.house.gov/media/pdf/111/cobra.pdf

Please note that the above-referenced website links may not yet reflect the most recent revisions to ARRA section 3001 extending the premium assistance subsidy.