By passing the extension of the COBRA subsidy Congress has extended the coverage in two ways.

• The eligibility period has been extended to include those who become eligible for COBRA due to losing their job (per original guidelines) on or before February 28, 2010.
• Also, the duration of the subsidy has been extended from 9 months to 15 months.

The new legislation also provides a second chance election period for those individuals whose subsidy eligibility ran out and didn't continue COBRA at the full premium rate. These new aspects of the existing COBRA provisions have created even more of a headache for those responsible for COBRA administration.

Some common questions and answers about the COBRA regulations can be found on the IRS website. For those new to the regulations or interested in a quick refresher:

A COBRA subsidy is available to "assistance eligible individuals", which is defined by the IRS as employees who are involuntarily terminated (and their beneficiaries). The termination needed to occur between 9/1/08 and 12/31/09. This "assistance eligible individual" is required to pay 35% of COBRA while the business is required to pay the remaining 65% of COBRA. The 65% paid by the employer will be refunded in the form of a credit against payroll taxes paid.

It is important for business owners to keep a couple things in mind pertaining to the COBRA regulations. First, an employee must have coverage on the existing health plan with the employer to be eligible for the subsidy. Second, the subsidy applies to all group health plans including medical, dental and vision (it does not cover flexible spending accounts).

If you have further questions about the COBRA Subsidy feel free to reach out to Kevin Mason at Genesis at 781-314-1136.