Employee Benefits-No COBRA Subsidy For Terminations After May 31

According to the Employee Benefits Security Administration’s COBRA web page, the Unemployment Compensation Extension Act of 2010, signed by the President on July 22, 2010, did not extend the COBRA premium reduction. Thus, individuals whose employment is terminated (involuntarily or otherwise) after May 31, 2010 are not eligible for this reduction.

By way of background, the American Recovery and Reinvestment Act (“ARRA”) provides a COBRA premium reduction (65% of the amount charged) for eligible individuals who are involuntarily terminated from employment through the end of May 2010. Due to a statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience involuntary terminations after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare.