Please enter your zip code to see FAQs tailored for your region.

ARRA - COBRA

PREMIUM REDUCTION

COBRA
Under the American Recovery and Reinvestment Act of 2009 (ARRA), the federal government pays 65% of COBRA premiums for Assistance Eligible Individuals (AEIs) when the covered employee was involuntarily terminated from employment between September 1, 2008 and December 31, 2009. Generally, the employer "fronts" the 65% subsidy and the federal government reimburses the employer through a payroll tax credit taken by the employer. On December 19, 2009, ARRA was amended to extend the COBRA premium reduction eligibility period for two months until February 28, 2010. In addition, the maximum period for receiving the subsidy was increased for an additional six months (from nine to 15 months). Employees who exhausted their nine months of COBRA premium assistance before December 19, 2009 and then dropped coverage are eligible for a second election period with retroactive enrollment. Those who exhausted their nine months of COBRA premium assistance and continued coverage under COBRA by paying full premiums must be retroactively reimbursed for the subsidized portion of the premium, to a maximum of 15 months of eligibility. Generally, the employer is responsible for notifying these members of their continued eligibility. See link to notices below.

• An employer's guide to COBRA
• COBRA premium reduction fact sheet for employers
• COBRA ARRA model notices

The COBRA Subsidy Frequently Asked Questions (FAQ) page contains information regarding our mutual responsibilities under these new provisions and provides answers to some of the more common questions about the new ARRA - COBRA law. We will be updating this FAQ as additional clarifications and guidance become available.

CHIPRA

We have also included a FAQ on the Children's Health Insurance Program Reauthorization Act (CHIPRA) legislation, which was signed into law on February 4, 2009, for you to distribute to your employees (whether enrolled or not).