COBRA Expansion Bills Introduced

Wednesday, November 04, 2009 - Infinisource

After months of speculation and murmurings in Washington, D.C., two bills were introduced in the House in late October to expand the COBRA subsidy program created by the American Recovery and Reinvestment Act of 2009 (ARRA).

The more expansive of the two bills is HR 3930. The bill has four major provisions:

・        Regular COBRA coverage would change. Qualifying Events with standard 18-month duration would be extended to 24 months for any termination of employment (voluntary or involuntary) or reduction of hours that occurred during the 21-month period starting on April 1, 2008, and ending on December 31, 2009.

・        If that COBRA coverage has already expired before the law is passed, affected Qualified Beneficiaries would have a second election right to obtain the additional six months of coverage.

・        The ARRA subsidy program would continue for involuntary terminations and loss of coverage occurring through June 30, 2010. However, all subsidies would end by December 31, 2010.

・         All ARRA subsidies would continue for up to 15 months, instead of the current nine months. Again, keep in mind that it is subject to the limitation that all subsidies would end by December 31, 2010. Thus, an assistance eligible individual whose subsidy starts on June 1, 2010, would get only seven months of subsidy, not nine or 15.

The second bill, HR 3966, would simply extend the ARRA subsidy program for involuntary terminations and loss of coverage occurring through June 30, 2010. Both bills are available for viewing at:  http://thomas.loc.gov.

Infinisource has already undertaken some preliminary steps to plan for expansion to COBRA and ARRA. We will provide more information as it becomes available. As of the writing of this article, both bills had been referred to three House committees. Rep. Joe Sestak (D-PA) is the sponsor of HR 3930, and Andre Carson (D-IN) is the sponsor of HR 3966.

Keep in mind that both bills are a long way from becoming law, and we have been tracking many other COBRA-related bills that were introduced in 2009. The growing consensus is that an ARRA expansion bill is likely to pass within the next three months because unemployment continues at unacceptably high levels. A bill like this might be part of another economic stimulus package or could find its way into the health care reform package being debated in both the House and Senate.