President Obama signed the bill containing the COBRA subsidy extension into law on Dec. 19, 2009.  With this extension, employers must act quickly to fulfill their notice obligations, update carriers and adjust administrative procedures. To smooth the transition, COBRAGuard Inc. is offering a free Webinar on Wednesday, Jan. 6 at 11 a.m. Central Time. The Webinar is entitled, “How to Get it Right the First Time – Your Action Plan for the ARRA Extension.” Company President Robert Meyers says, “A lot of people are talking about the core elements of the bill, but no one is saying much about what exactly must be done. Our goal is to give employers a practical guide.”

The free Webinar is open to the first 1,000 people who enroll online at http://www.cobraguard.net. Employers, third party administrators and insurance brokers are welcome. In addition, other Webinars are scheduled for COBRAGuard members. The Action Plan Webinar will cover notice obligations, eligibility and subsidy timelines. It will also go beyond the basics to delve into the practical dilemmas and potential stumbling points, such as:

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Although ARRA’s COBRA subsidy period is set to expire Dec. 31 and lawmakers are pushing for an extension, a decision has not yet been made.

If passed, it’s still unclear what form an extension of the COBRA subsidy program will take. Bills were introduced recently in the House and the Senate that not only extend COBRA benefits through June, but also increase the current subsidy of 65 percent to 75 percent. It’s unclear if the subsidy increase will apply to all current ARRA-eligible COBRA participants, newly-employed or both. It’s also unclear if those who have received 65 percent will be entitled to any adjustment for their time already on COBRA.

While uncertainty remains, it’s important to prepare for year-end and get ready for the possibility of a COBRA subsidy extension in the year ahead by taking these critical steps:

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Legislation to extend and enhance the COBRA subsidy was introduced last week in the Senate (S.2730) and the week before in the House of Representatives (HR. 3930). This proposed legislation will continue COBRA health care coverage for another six months to those who have been laid-off and their families. Though this is a great help for Americans on tight budgets, this proposal will leave employers scrambling.

COBRAGuard, a certified COBRA administrator, urges all employers to get ready for the extension. “Employers and COBRA participants will have to prepare for changes and be patient as lawmakers make up their minds,” said Robert Meyers, President of COBRAGuard Inc.

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Last week, legislation was introduced to extend and enhance the COBRA subsidy. The proposed legislation would extend the current subsidy by another 6 months, continuing the health care coverage to laid-off workers and their families.


If the bill passes and is enacted, employers will have to once again inform all their affected participants of the new changes and the extension. Under the proposal, the allowable time individuals qualify for COBRA benefits will grow from nine to 15 months and affect those involuntarily terminated between Jan. 1, 2010 and June 30, 2010. The bill will also allow the subsidy to those who have had their hours reduced and no longer qualify for employer-sponsored health plans. The subsidy amount would also increase from 65 percent to 75 percent of the participant’s premium.


Employers will be affected on all levels by this proposed bill. The bill includes several reforms, many of which are effective as of Jan. 1, 2010.

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At the end of this year, ARRA’s COBRA continuation subsidy period is slated to expire. Maybe you’ve already begun to contemplate how the change will affect your participants and your organization. Prepare for the final stages by following these important steps:

• Inform your participants of pending premium changes. Once the subsidy period ends, participants will be responsible for the ENTIRE portion of the COBRA premium. That means those who had a qualifying event on March 1 will start paying 100 percent of the premium due on December 1. Currently, eligible employees pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the employer through a tax credit. Give your participants plenty of advance notice so they’re not caught off guard by a larger COBRA invoice.
• Notify your carriers of changes in plan participation. Participants come and go – remember to remove them from the plan as they drop off. You don’t want to pay for coverage if the participant isn’t paying you! Many health insurance companies will only go back 60 days to remove an inactive participant. If you’re paying for someone who is no longer participating, you’re wasting money and adversely impacting your bottom line. Manage your carrier invoices by reconciling your participant roster regularly and communicating changes to your carriers.

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