Confusion Regarding the COBRA Subsidy

Published December 2009

As many people already know and more seem to find out every day, COBRA can be a difficult and complex regulation to comply with; even more so when the Department of Labor (DOL) releases COBRA notices that are confusing and borderline contradictory. Originally, the DOL interpreted the ARRA to read that individuals whom were “involuntary terminated” between September 1, 2008 and December 31, 2009 would be ARRA Subsidy eligible. The new interpretation of the law is different; whereas, one single second could make all the difference in ARRA Subsidy eligibility. BASIC’s software vendor has been in close communication with the DOL to ensure all participants are processed within compliance for our clients.

All previous indicators pointed to the bill titled Extended COBRA Continuation Protection Act of 2009 (HR3930) being finalized and signed by this point, but it is currently still in the first steps in the legislative process. In addition to HR3930 there are two additional bills that have been submitted in Congress, each could affect COBRA. It is believed by many that an extension to the COBRA subsidy, in some form, will be passed and may apply retroactively forcing businesses and administrators to once again contact terminated employees on a mass scale to inform them of the change and new options.

Keep in mind: if you administer COBRA incorrectly yourself and pay the subsidy for someone who otherwise wouldn’t have been eligible, then you could be stuck trying to collect the money back from former employees, money that originally would have been refunded by the government.


Now is the best time to consider BASIC for your COBRA administration. If you would like more information, visit the BASIC COBRA page or call 800-444-1922 X3 or email

If you would like a proposal, visit this page.