New Laws and Regulations - 2010

Congress recently voted to extend the 65% COBRA subsidy for unemployed workers. Currently the subsidy was set to expire December 31, 2009. Under the law, passed as part of the 2010 Department of Defense Appropriations Act, unemployed workers can now be eligible to receive the COBRA subsidy for 15 months, a significant increase from the nine months currently allowed.

The 2010 extension also applies to Unemployment Insurance benefits and permits employees who lose their jobs through Feb. 28, 2010 to get the subsidy. The extension is retroactive for those who have timed out after nine months and already lost benefits.

COBRA: Under the Act, the COBRA subsidy changes include:

• Expansion of the COBRA premium subsidy period from nine to 15 months.
• Extending the end date for eligibility for the subsidy from December 31, 2009, to February 28, 2010.
• Providing a retroactive period of 60 days for payment of premiums for eligible individuals whose subsidy period expired on November 30, 2009.
• Requiring a special notice outlining these changes within 60 days to all eligible individuals on COBRA on or after October 31, 2009, or those who are terminated after this date.
• Clarifying the original COBRA subsidy program, noting that eligibility and notice are based on the timing of the qualifying event.

The provision in the Department of Defense Appropriation Act, 2010 extending the COBRA premium reduction is available on the COBRA page at:

http://www.dol.gov/ebsa/cobra/COBRAPremiumReductionProvisionExtension.html

Unemployment Insurance: The Act also provides for an extension and expansion of unemployment insurance benefits in certain circumstances. Specifically,

• The current end date of December 31, 2009 is extended to February 28, 2010 for individuals to file applications for Federal Emergency Unemployment Compensation (EUC), and the period during which individuals may claim and be paid EUC is extended from May 31, 2010 to July 31, 2010.
• The current end date of January 1, 2010 is extended to February 28, 2010 for the time period during which individuals may qualify for the Federal Additional Compensation (FAC) (the extra $25 weekly benefit amount on state and federal unemployment compensation) and the weekly payment provided during the phase out period for weeks ending June 30, 2010 is extended to August 31, 2010.

• Review the Department of Labor's Fact Sheet to ensure your compliance with the new regulations.
• Review your records for any employee currently on COBRA to ensure that they are provided the full benefit of the extension of the subsidy.
• Make sure that your COBRA notices are up to date.