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More COBRA Help

Perhaps you recall that last spring President Obama signed the American Recovery and Reinvestment Act, which among other things provides a 65% subsidy for COBRA premiums for those who become COBRA eligible between September 1, 2008 and December 31, 2009. If you don’t recall this momentous event, then clearly you have not been reading our blog regularly, like all good people should, since we blogged about it back then. We even included a link to the IRS regulations that govern the program. Gosh, we are marvelous, not to mention thorough.

Well, now there’s news that the program will be extended to February 28, 2010. The extension is included as part of the Department of Defense Appropriations Act, which the President signed into law on December 19.

Here’s an important thing to know about this extension: your COBRA coverage doesn’t have to begin by February 28, 2010. Rather, your COBRA eligibility has to begin by February 28, 2010. For example, if you lose your job on February 28, you would be eligible for the extension, even though you probably won’t have your COBRA coverage in place until a month or two later.

If you really want to make your brain overheat, read through the Act here. You’ll have to wade through 63 pages of blah-blah-blah until you get to the COBRA stuff in Section 1010. Here’s our favorite tidbit:

(c) RULES RELATED TO 2009 EXTENSION.—Subsection (a) of such section is further amended by adding at the end the following: ‘‘(16) RULES RELATED TO 2009 EXTENSION.—
(A) ELECTION TO PAY PREMIUMS RETROACTIVELY AND MAINTAIN COBRA COVERAGE.—In the case of any premium for a period of coverage during an assistance eligible
individual’s transition period, such individual shall be treated for purposes of any COBRA continuation provision as having timely paid the amount of such premium if—
(i) such individual was covered under the COBRA continuation coverage to which such premium relates for the period of coverage immediately preceding such transition period, and
(ii) such individual pays, not later than 60 days after the date of the enactment of this paragraph (or,if later, 30 days after the date of provision of the notification required under subparagraph (D)(ii)), the amount of such premium, after the application of paragraph

That sure clears things up.

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