Employment Law Alert – Cobra Subsidy and Unemployment Insurance Laws Further Expanded/Extended

April 16, 2010

Late on April 15, 2010, President Obama signed H.R. 4851, the Continuing Extension Act of 2010.  This bill gives another short-term extension of COBRA subsidy and unemployment benefits, affording Congress additional time to decide whether these benefits should be extended through December 31, 2010.

In February 2009, Berliner Cohen brought you an update on the American Recovery and Reinvestment Act’s (“ARRA”) impact on an employer’s obligations under COBRA (click here).  ARRA put into place a subsidy program under which employers who are covered by COBRA were to (1) identify employees involuntarily terminated during the period of September 1, 2008 and December 31, 2009; (2) reduce the COBRA premium for eligible individuals and their eligible dependents by 65%; (3) extend the COBRA election period for eligible employees who did not enroll in COBRA prior to February 17, 2009, and notify these employees that they can now enroll in COBRA at reduced rates; and (4) update their COBRA notification and election forms.

ARRA’s provisions were extended through March 31, 2010 by the Temporary Extension Act of 2010.  The new Continuing Extension Act of 2010 provides that individuals who lost their jobs prior to May 31, 2010 may be eligible for the 65% subsidy for COBRA health insurance, and provides transition relief for those who lost their jobs between March 31, 2010 and April 15, 2010. 

The bill further extends the period in which individuals may file applications for Federal Emergency Unemployment Compensation (EUC) from April 5, 2010 to June 2, 2010, and the period for which individuals may claim and be paid EUC from September 4, 2010 to November 6, 2010.  The time periods during which individuals may apply for and be paid the additional $25 weekly benefit amount on state and federal unemployment compensation are extended to these same dates. 

The period in which the federal government will provide 100% reimbursement for weeks of regular federal extended benefit payments is lengthened from April 5, 2010 to June 2, 2010, with the state option to continue the benefit extension period expanded from September 4, 2010 to November 6, 2010.

Berliner Cohen will continue to track the progress of this legislation, as well as how the California Legislature reacts with respect to AB 23, which extended the COBRA subsidy to cover employers of fewer than 20 employees.

If you have any questions regarding these changes or how they affect your business, please call Kara Arguello or any member of Berliner Cohen’s Employment Law Group.

Roberta S. Hayashi

Christine Long

Kara L. Arguello



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