Federal COBRA Subsidy Coming to an End

The March 2009 Federal COBRA subsidy that mandated employers cover 65% of COBRA premiums for employees who were involuntarily terminated between September 2008 and May 2010 for a period of up to 15 months is coming to an end. The last group of eligible recipients (those who began receiving assistance in May 2010) will cease to be subsidy-eligible as of August 31^st, 2011.  This means that anyone receiving assistance through the subsidy will now be responsible for 100% of the COBRA premiums should they choose to continue coverage.
There is currently no pending action from Congress that would extend the subsidy any further.
What does this mean?
People no longer benefiting from the subsidy may seek to save money with a less expensive individual policy.
Please note, some employers may not be aware that they are no longer required to subsidize terminated employees’ COBRA premiums. Employers had been responsible for paying the 65% subsidy up front. They would then be eligible to recover those monies in the form of credit toward their quarterly employment tax return. When the subsidy is no longer mandated, the tax credit will no longer be available.
Also, some individuals may not be aware they’ll no longer be getting a subsidy. While employers are encouraged to send a notice to subsidy beneficiaries that their eligibility is coming to an end, there are no requirements of such notice in place.