Update August 2010: It is no longer possible to qualify for this subsidy. As explained below, among other eligibility requirements, you must have experienced a qualifying COBRA event on or before May 31, 2010 to be eligible. The information below is provided for historical reference only.
The American Recovery and Reinvestment Act of 2009 (ARRA), as Amended, reduces the COBRA premium in some cases. If you experienced a loss of health coverage related to an involuntary termination of employment you may be eligible for the temporary premium reduction for up to fifteen months. If you believe you meet the criteria for the premium reduction, you must complete the "Application for Treatment as an Assistance Eligible Individual" available in your COBRA notice and return it with your completed COBRA Election Form.
President Obama signed the American Recovery and Reinvestment Act (ARRA) on February 17, 2009. ARRA has been amended three times: on December 19, 2009, the President signed the Department of Defense Appropriations Act 2010 (2010 DOD Act). On March 2, 2010 the President signed the Temporary Extension Act of 2010 (TEA). On April 15, 2010, the President signed the Continuing Extension Act of 2010 (CEA). These laws give "Assistance Eligible Individuals" the right to pay reduced COBRA premiums for periods of coverage beginning on or after February 17, 2009 and can last up to 15 months.
To be considered an "Assistance Eligible Individual" and get reduced premiums you:
- MUST have a continuation coverage election opportunity related to an involuntary termination of employment that occurred at some time from September 1, 2008 through May 31, 2010;*
- MUST elect the coverage;
- MUST NOT be eligible for Medicare; AND
- MUST NOT be eligible for coverage under any other group health plan, such as a plan sponsored by a successor employer or a spouse's employer. **
* The involuntary termination must occur on or after March 2, 2010 if it is preceded by a qualifying event that was a reduction of hours occurring at any time from September 1, 2008 through May 31, 2010.
** Generally, this does not include coverage for only dental, vision, counseling, or referral services; coverage under a health flexible spending arrangement; or treatment that is furnished in an on-site medical facility maintained by the employer.
- If, after you elect COBRA and while you are paying the reduced premium, you become eligible for other group health plan coverage or Medicare you MUST notify the plan in writing. If you do not, you may be subject to a tax penalty.
- Electing the premium reduction disqualifies you for the Health Coverage Tax Credit. If you are eligible for the Health Coverage Tax Credit, which could be more valuable than the premium reduction, you will have received a notification from the IRS.
- You cannot use money from your tax-free Multnomah County HRA VEBA account to pay reduced COBRA premiums.
- The amount of the premium reduction is recaptured for certain high income individuals. If the amount you earn for the year is more than $125,000 (or $250,000 for married couples filing a joint federal income tax return) all or part of the premium reduction may be recaptured by an increase in your income tax liability for the year. If you think that your income may exceed the amounts above, you may wish to consider waiving your right to the premium reduction. For more information, consult your tax preparer or visit the IRS webpage on ARRA at www.irs.gov
For general information regarding your plan's COBRA coverage or specific information related to your plan's administration of the ARRA Premium Reduction or to notify the plan of your ineligibility to continue paying reduced premiums, please contact Multnomah County Employee Benefits Office, 501 SE Hawthorne Blvd, Suite 400, Portland, OR 97214, 503-988-3477, firstname.lastname@example.org.
If you are denied treatment as an "Assistance Eligible Individual" you may have the right to have the denial reviewed. For more information regarding reviews or for general information about the ARRA Premium Reduction go to: www.ContinuationCoverage.net or call 1-866-400-6689.