On April 15, 2010, Congress passed, and President Obama signed into law, the Continuing Extension Act of 2010 (H.R. 4851) ("the Act"). Among other things, this law acts to further extend the premium assistance for COBRA benefits created under the American Recovery and Reinvestment Act of 2009 ("ARRA"), which had already been amended multiple times for the same purpose. Please see our recent publications, "President Obama Signs Stimulus Plan with COBRA Expansion" (B&G Publication, February 18, 2009) and "COBRA Subsidy Extended" (B&G Publication, December 22, 2009) for more information.

Under ARRA, as amended, the 65% COBRA premium subsidy benefitted those individuals who were eligible for continued medical coverage (other than a flexible spending account) under COBRA or state law because of a covered employee's involuntary termination of employment at any time from September 1, 2008 through March 31, 2010 (assistance eligible individuals, or "AEIs") for up to fifteen (15) months. Most notably, the Act now extends the COBRA premium subsidy to those individuals whose employment is involuntarily terminated at any time from September 1, 2008 through May 31, 2010. This extension is retroactive to those individuals who experienced an involuntary termination in early April, 2010, during which time period the ARRA COBRA premium subsidy had expired and had not yet been re-extended by the Act. Employers are required to notify AEIs of their rights with respect to the continued COBRA subsidy, including individuals affected by the retroactive application of this extension (even if the individual has already declined COBRA coverage).

While the Act only extends the COBRA subsidy through the end of May, 2010, Congress is considering an extension through the end of the 2010 year.