Washington Considers Extending ARRA Subsidies

Wednesday, October 07, 2009

When the American Recovery and Reinvestment Act of 2009 (ARRA) became law in February, a stated purpose was to “assist those most impacted by the recession.” At the time, the unemployment rate was 8.9 percent. In September, this rate was 9.5 percent. As a result, leaders in Washington, D.C. are strongly considering the extension of the COBRA subsidy program.

Recall that the subsidy is for a period of up to nine months for those who experienced an involuntary termination from September 1, 2008, through December 31, 2009. At Infinisource, we have seen COBRA election rates more than double because of the subsidy.

In early October, White House representatives acknowledged that President Obama is considering expansion of the ARRA subsidy. "There are a number of ideas that have been implemented that are coming to a legislative end," said Press Secretary Robert Gibbs .

This statement mirrors a report issued shortly before the August recess that Congress was considering similar action. This statement also is aligned with feedback received by Infinisource in recent informal talks with the Treasury Department.

How and when this COBRA expansion would occur is unclear. Due to the slow movement of health care reform legislation, it is quite possible that the COBRA provisions would be part of a separate bill. One thing is clear:  many who are “most impacted by the recession” will lose their COBRA subsidy on November 30 unless a law is passed.

Infinisource has already been preparing for this possibility:

• Our Enterprise® system is ready to handle any new subsidies or extension of current subsidies.
• We will provide frequent updates through The Source, as we did in the past.
• We have an agile work team that is all set to implement whatever is enacted.