COBRA subsidy has been extended

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Earlier this week, on March 2, 2010, The American Recovery and Reinvestment Act of 2009 (ARRA), was amended by the Temporary Extension Act of 2010. The act provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Eligible individuals pay a reduced rate (35 percent) of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee’s employment. This act only applies to involuntary termination must generally occur during the period between September 1, 2008 and March 31, 2010. (An involuntary termination of employment that occurs on or after March 2, 2010 and follows a qualifying event that was a reduction of hours and that occurred at any time from September 1, 2008 through March 31, 2010 is also a qualifying event for purposes of ARRA.) The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months. See Temporary Extension Act