After much debate on the Senate floor this week over budgetary concerns, President Obama signed into law the Continuing Extension Act of 2010 on April 15, 2010. The legislation provides short extensions for the COBRA premium subsidy and unemployment compensation benefits, as well as other federal programs.

COBRA Premium Subsidy. The date for incurring an involuntary termination of employment that qualifies for the COBRA premium subsidy has been extended for two months, from March 31, 2010, to May 31, 2010. The Act provides that individuals who were involuntarily terminated between April 1, 2010, and April 15, 2010, are also eligible to receive the subsidy. Employers should review and update their COBRA notices to reflect the subsidy’s new end date. Measures to extend the subsidy to the end of 2010 are still being considered by Congress.

Unemployment Compensation.   The Act's unemployment insurance provisions extend various benefit periods. The period during which individuals may apply for federal emergency unemployment compensation has been extended to June 2, 2010. Federal emergency unemployment compensation is now payable through November 6, 2010.

The Act also extends the period during which individuals who qualify for the federal additional compensation (i.e., the amount to which the employee would be entitled under state unemployment compensation law, plus an additional $25) to June 2, 2010. Additional compensation will now be payable through the week ending December 7, 2010, rather than October 5, 2010.

The Act extends the period during which extended benefits are fully funded by the federal government to June 2, 2010. States may opt to continue the period of extended benefits to November 6, 2010, rather than September 4, 2010.

Future Guidance

For more information on the COBRA subsidy rules, click here.

If you have any questions about how this Act may affect your operations, please call Brian D. Pedrow (pedrow@ballardspahr.com or 215.864.8108), or any member of Ballard Spahr's Employee Benefits and Executive Compensation Group or Labor and Employment Group.


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