Employment Law Alert – Senate Extends Cobra Subsidy and Unemployment Insurance

March 04, 2010

On March 2, 2010, the United States Senate passed legislation granting short-term extensions of COBRA subsidy and unemployment benefits, thereby giving Congress additional time to consider legislation, which would extend these programs through 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: “Employment Law Alert – Stimulus Package Adds New Employer Notification 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.

In December, 2009, Berliner Cohen published an update on Congress’ passage of the Fiscal Year 2010 Department of Defense (DOD) Appropriations Act (the “DOD Bill”): “Employment Law Alert – Cobra Subsidy and Unemployment Insurance Expansion Signed into Law” (click here).  The DOD Bill extended and expanded the COBRA subsidy program that was enacted under ARRA as well as unemployment benefits by extending the time periods during which employers must subsidize 65% of COBRA premiums, as well as the eligibility period for that subsidy, and the time period and eligibility period for Federal Emergency Unemployment Compensation (EUC). 

On March 2, 2010, the United States Senate passed H.R. 4691, the Temporary Extension Act of 2010, and President Obama signed it into law the same day.  The Temporary Extension Act further extends the eligibility period for the COBRA subsidy to those involuntarily terminated from March 1, 2010 through March 31, 2010.  It also allows employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment of the bill.

The law also affects unemployment insurance as follows:

  • The end date by which individuals may apply for Federal Emergency Unemployment Compensation (EUC) is extended from February 28, 2010 (to April 5, 2010;
  • The period during which individuals may be paid EUC is extended from July 31, 2010 to September 4, 2010;
  • The period during which individuals may qualify for the Federal Additional Compensation (FAC), the $25 weekly benefit amount added to state and federal unemployment compensation, is extended from the previous end date of February 28, 2010 to April 5, 2010, with weekly payment provided during the phase-out period for weeks ending October 5, 2010 (instead of August 31, 2010);
  • The period during which 100% federal reimbursement for weeks of regular federal extended benefit payments is extended to April 5, 2010, with the state option to continue the extended period lengthened from July 31, 2010 to September 4, 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 ARRA to cover employers of fewer than 20 employees.

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

Roberta S. Hayashi

Christine Long

Kara L. Arguello


©2010 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.

Berliner Cohen’s experienced employment law attorneys advise and represent employers and managers on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For 40 years, the Firm has developed the special expertise required by a diverse client base consisting of nationally recognized business interests and a number of Silicon Valley’s largest national and multinational corporations, new ventures, leading real estate developers and brokerages, cutting-edge technology companies, healthcare and other service providers, banking and financial institutions, municipalities, public agencies and individuals.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.