On December 16, the U.S. House of Representatives approved legislation that would extend the federal subsidy of COBRA premiums for employees who were involuntarily terminated.

H.R. 3326, which was actually a bill that provided for Defense Department funding, include a provision that would extend the 9 month subsidy period by an additional 6 months (for a total of 15 months) and would extend the eligibility period to persons who have an involuntary termination through February 28, 2010. The subsidy remains at 65% of premium, meaning employees would still pay 35%.

It appears that the general intent of the bill is to extend edibility through 2/28/2010. There are no specific details yet with respect to whether those who have exhausted the 9 month existing subsidy could obtain the additional 6 months, or if those who have dropped COBRA coverage prior to 12/31/09 because of exhaustion of the subsidy will be eligible to re-elect coverage to take advantage of the extension. Those details would have to come from the IRS and DOL, assuming the measure passes the Senate.

Also, H.R. 2847 is still pending with a provision to extend eligibility through June 30, 2010. As with H.R. 3326, details are still missing concerning retroactive application but we anticipate guidance on that issue if either (or both bills) ultimately become law. Stay tuned.