End of Nine-Month Coverage Period
For most employers, the first month of ARRA-subsidized coverage began on March 1, 2009. The most significant increase in COBRA enrollment began on this date because it included everyone that was eligible for the second chance election, as well as eligible participants that were already enrolled in COBRA. The nine-month ARRA subsidy period ends on November 30, 2009 for these participants. Beginning December 1, premiums will revert back to the 102% of the premium rate that was charged prior to the ARRA subsidy. These participants may also experience an additional cost increase on January 1, 2010 for health plans that renew on January 1. Your COBRA administrator should make sure that COBRA participants are aware that they must pay the unsubsidized premium amount once the subsidy period expires.

Last Day to be an Assistance Eligible Individual
The ARRA subsidy only applies to individuals that are both involuntarily terminated between September 1, 2008 and December 31, 2009 and begin COBRA coverage between these dates. Most health plans continue active coverage through the last day of the month following the termination of employment. The subsidy will not be available to any individuals that experience an involuntary termination of employment during the month of December because the January 1, 2010 COBRA start date falls outside of the ARRA subsidy period. IRS/Treasury Notice 2009-27 Q&A 13 addresses this requirement:

Q.	If an individual’s involuntary termination occurs no later than December 31, 2009, but the loss of coverage resulting in eligibility for COBRA continuation coverage occurs after December 31, 2009, is the individual an assistance eligible individual?
A.	No. Both the involuntary termination and eligibility for COBRA continuation coverage must occur during the period from September 1, 2008 through December 31, 2009. If the loss of coverage is after December 31, 2009, the individual cannot become an assistance eligible individual.

Unless the IRS provides additional guidance, November 30, 2009 will be the last date that most individuals can be involuntarily terminated and still be eligible for ARRA. For plans that terminate coverage on the Date of Termination, December 30, 2009 will be the last date that a person can be involuntarily terminated and still be eligible for ARRA.

Pending Legislation 
Congress has not yet enacted an extension to ARRA. Legislation has been introduced that would extend the length of the ARRA subsidy period and/or extend the time period that a person could qualify for the ARRA subsidy. Three different bills have been introduced (S. 2730, HR 3930, HR 3966). All three bills remain in committees for further review and it remains to be seen whether they will be voted upon and/or signed into law. It is unlikely that we will see an extension of the law before December 1.