On 19 December 2009, the President signed into law H.R. 3326, Department of Defense Appropriations Act 2010. Included in this legislation were provisions to extend the Emergency Unemployment Compensation (EUC) and COBRA subsidy programs.


Emergency Unemployment Compensation

  • The Emergency Unemployment Compensation (EUC) program was established in July 2008. Presently, this temporary program provides up to 53 weeks of additional unemployment benefits for individuals who have exhausted their standard Unemployment Compensation (UC). This program contains four tiers of benefits. The beneficiary must apply for each tier separately once their existing benefits have been exhausted.
    • Tier I: 20 weeks of benefits.
    • Tier II: 14 additional weeks.
    • Tier III: 13 additional weeks for workers in states with an average unemployment rate of 6% or higher (including Pennsylvania).
    • Tier IV: 6 additional weeks for workers in states with an average unemployment rate of 8.5% or higher (including Pennsylvania).
  • Under H.R. 3326 EUC beneficiaries are eligible to apply for new benefits or the next tier of benefits until 28 February 2010 (this date has been moved up from the original deadline of 26 December 2009).
  • Benefits applied for and approved before the program termination deadline may be collected in full until those benefits are depleted.
  • This legislation does not alter the maximum 99 weeks of EUC benefits (four tiers plus state benefits) as made available under current law.


COBRA Premium Reduction

  • The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20 or more employees to provide employees and their families with the option of continuing their health insurance coverage under the employer’s group health insurance plan when they experience a change in their employment or family status (such as termination of employment, divorce, or a dependant aging out of a health plan).
  • Individuals who opt to extend their coverage through COBRA can be required to pay up to 102% of the premium. Unfortunately, many families find that they cannot afford the COBRA payment.  
  • Workers involuntarily terminated between 1 September 2008 and 28 February 2010 are eligible for a subsidy to help pay the cost of their COBRA premiums.
    • Under this subsidy, the former employee pays only 35% of the COBRA premium.
    • The remaining 65% is paid for by the former employer, who is then reimbursed by the federal government in the form of a payroll tax credit.
  • Newly passed legislation increases the length of time an individual may receive the subsidy, from 9 months to 15 months. This may affect beneficiaries in one of four ways:
    • New enrollees will receive the full 15 month COBRA subsidy.
    • Individuals who previously applied for and are currently receiving premium reduction, will have their subsidy automatically extended from 9 months to 15.
    • Individuals who exhausted their subsidy but remained enrolled in COBRA coverage may be refunded the value of the subsidy that they paid during that time and continue receiving the subsidy until 15 months after the date that their premium reduction began.
    • Individuals who exhausted their benefit and subsequently disenrolled from COBRA coverage may reenroll and receive the subsidy for 6 months.