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Laws for Federal Extension of COBRA Unemployment Benefits

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides those who have been involuntarily laid off from their job an opportunity to continue with their former employer's health care plan for a period of time as long as they pay 100 percent of the premium themselves. This can be expensive, especially if you are unemployed, so in 2009, Congress enacted a new law that agreed to subsidize part of the premium to help people maintain their health coverage even after they lose their jobs.

  1. Consolidated Omnibus Budget Reconciliation Act of 1985

    • The original COBRA law, enacted in 1985, provides people with the opportunity to continue health care coverage for up to 18 months after they are discharged from their jobs. This law also extends to the former employee's spouse and other legal dependents. The laid-off employee has up to 60 days after notification of COBRA eligibility or termination of benefits, whichever is later, to opt for COBRA coverage. If the person waits longer than 60 days, COBRA coverage becomes unavailable.

    American Recovery and Reinvestment Act of 2009

    • In 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act as part of a stimulus plan designed to help soften the blow of a nation-wide recession. This act amended the original COBRA law by providing a government subsidy, which pays 65 percent of the health insurance premium for up to nine months for those eligible for COBRA coverage. At the time this act was passed, it applied to anyone eligible for COBRA between Sept. 1, 2008, and Dec. 31, 2009.

    Department of Defense Appropriations Act of 2010

    • In 2010, Congress passed the Department of Defense Appropriations Act, which temporarily extended the subsidy provided in the 2009 act in several ways. It extended premium assistance to people who were involuntarily terminated from their jobs between January and February 2010. In addition, it extended premium assistance for those eligible to 15 months from nine months.

    Temporary Extension Act of 2010

    • On March 31, 2010, President Obama signed into law the Temporary Extension Act. TEA extended premium assistance coverage for those who lost their jobs up to the date this act was signed. In addition, this new act provided the Department of Health and Human Services with the power to penalize employers up to $110 per day if they failed to comply with other COBRA provisions, which require them to provide access to continued health coverage for employees they had terminated.

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