On February 17, 2009, President Barack Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA), commonly called the Stimulus Plan.  ARRA provides for premium reductions and additional election opportunities for health benefits under Federal continuation, commonly called COBRA.  Eligible individuals pay only 35% of the COBRA premium and the remaining 65% is reimbursed to the coverage provider (such as an insurance company or HMO or other plan) through a tax credit.  The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and originally lasted for up to nine months. ARRA was amended on December 19, 2009 by the Department of Defense Appropriations Act, 2010, and extended the premium reduction period from nine months to fifteen months as well as the eligibility period from December 31, 2009 until February 28, 2010. On March 2, 2010 ARRA was again amended by the Temporary Extension Act of 2010 extending the eligibility period until March 31, 2010. On April 15, 2010 ARRA was again amended by the Continuing Extension Act of 2010 extending the eligibility period until May 31, 2010. The premium reduction under ARRA is not available for individuals who experience involuntary terminations after May 31, 2010.

For information about COBRA contact the U.S. Department of Labor Employee Benefits Security Administration at 1-866-444-3272 or visit the agency’s website: www.dol.gov/ebsa/COBRA.html

For information about New Jersey Small Group Continuation – applicable to small employers employing fewer than 20 employees – see the New Jersey Small Employer’s Health Benefits Program Buyer’s Guide section about continuation of coverage as well as Advisory Bulletin 07-SEH-02.