On April 15, 2010, Congress passed the Continuing Extension Act of 2010, (the “Extension Act”), which extended the COBRA subsidy eligibility period to include individuals who are involuntarily terminated on or before May 31, 2010. The President signed the Extension Act into law shortly after it passed. The subsidy covers 65% of the cost of COBRA coverage.

Last month, Congress extended the COBRA subsidy eligibility period to March 31, 2010, but Congress failed to further extend the deadline prior to the March 31st expiration. The Extension Act extends eligibility retroactively, so individuals involuntarily terminated after March 31st but before the Extension Act was passed are now eligible to receive the subsidy. The Extension Act requires employers to notify these former employees regarding eligibility.

While the Extension Act only extended the COBRA subsidy eligibility period through May 31st, Congress is currently considering a longer extension.