COBRA and Health Care Reform
25 March 2010
Health care reform and the impacts on insurance plans are going to continue developing for quite some time. Businesses will need to focus on changes to group plans for employees as well as changes that may go into effect regarding COBRA coverage. Don’t expect everything to be settled regarding COBRA all at once.
SolutionPipe is networked with Rocky Mountain Reserve, a U.S. provider of Flexible Spending Accounts and COBRA Processing Services. For help navigating this complex and ever-changing benefit system, please contact SolutionPipe.
The American Recovery and Reinvestment Act of 2009 (ARRA) included a premium subsidy and extension both increasing the complexity of COBRA administration. It continues to be amended. In 2010 it has been amended twice. COBRA-related amendments include the Department of Defense Appropriations Act, 2010 (2010 DOD Act) and the Temporary Extension Act of 2010 (TEA). TEA was signed by the president on March 2, 2010.
TEA amended ARRA to further extend the period to qualify for the COBRA premium reduction until March 31, 2010. TEA also provides that an involuntary termination of employment that occurs on or after March 2, 2010 but by March 31, 2010 is a qualifying event for purposes of ARRA if it was preceded by a qualifying event that was a reduction of hours occurring at any time from September 1, 2008 through March 31, 2010.
Benefits administrators can expect the recent health care bill to trigger questions from plan participants regarding impacts on COBRA benefits. While there are not currently COBRA provisions in the bill signed by the president, benefit administrators will need to keep their eyes on amendments and other actions related to health care reform that may go through Washington.
In addition to health care reform changes from Washington, administrators should keep track of what is going on at the state level with respect to health care reform. The attorney generals from several states have filed motions with the courts regarding the constitutionality of health care reform. Other states are working on legislation specific to their states regarding applicability of provisions under the health care reform bill to their residents.
So, what is the answer the question “What are the impacts of health care reform on COBRA?” Stay tuned and watch new legislation at both the federal and state level. COBRA-related requirements can appear at any time and may differ depending on state locations.
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