Holiday expansion

Most of us think of the holidays as a time to celebrate, be with the ones we love, and, unfortunately, put on a few pounds. This year, thanks to our Executive and Legislative Branches, any waistline gain wasn't the only expansion going on.

On December 19, 2009, President Obama signed a bill that allows the COBRA premium subsidy law to continue beyond its original sunset date of December 31, 2009. In the course of passing this extension, provisions were also added which expands the group of Assistant-Eligible Individuals ("AEIs").

Some highlights:

• The subsidy period is increased from 9 to 15 months
• A qualifying event for the subsidy is now covered by the period of September 1, 2008 through February 28, 2010.
• If a former employee is now an AEI due to this amendment, that former employee has a transition period.
• If you have an AEI who (1) did not timely make a COBRA premium payment prior to the passing of this amendment or (2) paid a full premium when now it could be a subsidized premium, you must give that AEI a notice of the new law. This notice is to be issued within the first 60 days of the AEI's transition period.
• If you have a former employee who became an AEI after October 31, 2009, you must provide that former employee with the new notice.

The amendments include other provisions which will be of interest to employers. Employers should consider contacting their third-party administrators or legal counsel to discuss how the amendments might impact them.