As anticipated, Congress has extended the COBRA premium reduction to individuals that have experienced an involuntary termination of employment at any point from September 1, 2008 through May 31, 2010 or if from March 2, 2010 through May 31, 2010 the involuntary termination followed a qualifying event that was a reduction in hours that occurred anytime from September 1, 2008 through May 31, 2010. “Assistance eligible individuals” pay only 35% of their COBRA premiums with the remaining 65% reimbursed to the coverage provider through a tax credit.
A new penalty provision was added to ARRA that provides for the appropriate Secretary to access a penalty against a plan sponsor or health insurance insurer of up to $110 per day for each failure to comply with such Secretary’s determination 10 days after the date of the plan sponsor’s or issuer’s receipt of the determination.
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