Employment Law and Selective Service Blog


Eligibility for COBRA Subsidy Under ARRA Expires

Posted by Marc Smith | Apr 08, 2010 | 0 Comments

As most employers and employees know, COBRA is the federal law that allows certain individuals to extend employer-provided group health coverage if they would otherwise lose the coverage due to certain events such as loss of a job. The premiums for continuing coverage are borne by the employee or other person electing coverage, and can be quite costly.

The American Recovery and Reinvestment Act of 2009 (“ARRA”), part of the economic stimulus package, temporarily reduces the premium for COBRA or comparable State continuation coverage for eligible individuals. In a nutshell, the individual electing coverage had to pay 35% of the premium and the employer was responsible for the remaining 65%. Subsequent Acts extended both the period to qualify for the COBRA premium reduction, as well as the maximum period for receiving the subsidy (from nine to 15 months). The last extension just recently expired on March 31, 2010.

Thus, individuals who are eligible for COBRA coverage because of their own or a family member's involuntary termination from employment that occurred during the period from September 1, 2008 through March 31, 2010 and who elect COBRA may be eligible to pay a reduced premium. Eligible individuals pay only 35% of the premium for COBRA coverage under their plans for up to 15 months. This premium reduction is generally available for continuation coverage under the Federal COBRA provisions, as well as for group health insurance coverage under comparable State continuation coverage laws.

About the Author

Marc Smith

Marc J. Smith is a Rockville, Maryland employment attorney and a founding member of the law firm formerly known as Smith, Lease & Goldstein, LLC. In 2018, after 18 years managing Smith, Lease & Goldstein, LLC's employment counseling and litigation practice, Marc launched his own boutique practice...


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Representation Of Employers And Employees

The Law Office of Marc J. Smith, LLC is a boutique employment law practice based in downtown Rockville, Maryland near the Montgomery County Circuit and District Courts. The Firm’s practice focuses exclusively in the employment law arena and provides counseling, litigation and a wide range of other employment-related services to employers and employees throughout the State of Maryland, Washington D.C. and other jurisdictions. The Firm also represents individuals who have failed to register with the Selective Service System and who are trying to apply for or maintain federal employment.