In mid-December, the U.S. Senate and House passed and the President signed the Fiscal Year 2010 Department of Defense Appropriations Act. The provisions included an expansion and extension of the COBRA subsidy program that was enacted under the president’s original stimulus program, the American Recovery and Reinvestment Act (ARRA).

You’ll recall that these obligations in early 2009 required employers or others who administer insurance plans to temporarily subsidize 65 percent of the COBRA insurance premiums for any employee and qualified family members continuing their coverage through the federal COBRA or NYS continuation programs (mini-COBRA). It applied to employees who involuntarily lost their jobs from September 1, 2008 to December 31, 2009. The subsidy arrangement began on March 1, 2009 and lasted a maximum of nine months. Employers or others administering the COBRA or continuation plan were then able to recover the premium subsidy paid by claiming a credit on the future payroll taxes paid through submission of the IRS Form 941 which had been modified by the IRS for this purpose.

The program has now been expanded from the original nine (9) months to fifteen (15) months. So, if you have anyone who completed their 9 months of subsidy, make arrangements to offer it for an additional 6 months. Since the program began March 1, 2009, the original 9 months expired on November 30, 2009. With the expansion, those folks whose subsidy ended in November or later have an opportunity to continue for another 6 months.

Eligibility for the subsidy has also been extended from the original expiration date of December 31, 2009 to February 28, 2010. So, any employees who involuntarily lost their jobs in January or February 2010 will have an opportunity to receive the subsidy and for an expanded time period of 15 months as described above.

Check you records, change your notices, communicate with your employees and call me on The Business Council’s HR Line at 800-332-2117 if I can be of assistance.