President Obama’s proposed federal budget for fiscal year 2011 would extend the 65% subsidy for eligible individuals who wish to continue group health plan coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). The America Recovery and Reinvestment Act of 2009 contained a COBRA continuation coverage premium subsidy that allowed eligible individuals, those who had lost group health plan coverage due to an involuntary termination of employment between September 1, 2008, and December 31, 2009, to pay only 35% of the regular COBRA premium for up to nine months. The Department of Defense Appropriations Act of 2010 then (1) extended the eligibility time period to those who were involuntarily terminated before February 28, 2010, (2) removed the requirement of the loss of health plan benefits, and (3) extended the subsidy time period to 15 months. The proposed federal budget for 2011 would enable employees who are involuntarily terminated from March 1, 2010, through December 31, 2010, to receive the subsidy. While a bipartisan jobs bill that contained provisions to extend the subsidy was scrapped last week, it is likely that the provisions will be re-introduced in another bill over the next several weeks.

Click here for more information about the original COBRA subsidy.

Click here for more information about the original extension.