COBRA Premium Subsidy
The American Recovery and Reinvestment Act of 2009 (ARRA), as amended by the Department of Defense Appropriations Act, 2010 and the Temporary Extension Act of 2010, provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. “Assistance Eligible Individuals” pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed through an employer tax credit. The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.
Eligibility for the Premium Reduction
To be considered an "Assistance Eligible Individual" and receive the reduced premiums you:- must have been involuntarily terminated at any point from September 1, 2008 through May 31, 2010
- became eligible for COBRA coverage as a result of a reduction in hours occurring between Sept. 1, 2008, and May 31, 2010, followed by an involuntary termination between March 2, 2010 and May 31, 2010
- must be eligible for continuation of coverage under COBRA, and
- must elect COBRA coverage timely
- must not be eligible for other group health plan coverage, including Medicare.
State Health Plan Process
Blue Cross and Blue Shield of North Carolina (BCBSNC) will issue the COBRA subsidy notice that will include the following documents, along with the normal COBRA offer letter to all COBRA eligible individuals.- Summary of the COBRA Premium Reduction Provisions under ARRA, Amended
- Ongoing COBRA Letter
- Ongoing Application for Treatment as an Assistance Eligible Individual
- Participant Notification of Ineligibility
- FAQs -- COBRA Subsidy and RIF
For additional information on ARRA go to the Department of Labor website at www.dol.gov/ebsa/cobra.html or the Internal Revenue Web site at www.irs.gov/newsroom/article/0,,id=204505,00.html
