Length of COBRA Subsidy Period

[Chaz]

Employee involuntarily terminates March 1. Company pays 100% of coverage for first three months of COBRA period (which runs concurrently with this three month period). How long is the employee entitled to receive the COBRA subsidy, for six months or for the full nine?

[jpod]

Is the COBRA period beginning immediately? If so, 6 months.

Is the COBRA period beginning at the start of the 4th month (which presupposes that your group insurance contract will let you defer commencement of the maximum COBRA period, if you are insured)? If so, 9 months.

[GMK]

jpod - not questioning your response. Just curious about how you know this. Thanks.

[oriecat]

I have also heard the same as jpod posted, and someone said it was in the DOL webcast.

[jpod]

This appears to be the natural consequence of 4980B(f)(8), and I think this was confirmed during the webcast.

[GMK]

Thanks for the responses.

So, an AEI's first 9 months of COBRA coverage after mid-February 2009 are the only months eligible for the "up to 9 months" of ARRA premium reduction, yes?

[401 Chaos]

Thanks for the responses.

So, an AEI's first 9 months of COBRA coverage after mid-February 2009 are the only months eligible for the "up to 9 months" of ARRA premium reduction, yes?

Basically yes as I understand the rules at least for those eligible as of enactment. For those becoming eligible at a later date, it is basically the first 9 months of coverage starting at that later date. I suppose the rule (at least per the guidance) could technically be summarized as the first 9 months from the later of (i) beginning of COBRA continuation coverage, or (ii) date of ARRA enactment.

Keep in mind though that the subsidy could terminate before the maximum period (i.e., before the first 9 months) upon individual's eligibility under other group health plan or Medicare or end of COBRA continuation period (which might include a variety of reasons such as end of regular COBRA or employer's termination of all group health plans).

[Chaz]

The IRS guidance confirmed your all interpretation. Thanks!