Fact Sheet 

U. S. Department of Labor 

Employee Benefits Security Administration 

August 2010 

COBRA premium subsidy expiring? 

Follow these TIPS to make sure you don’t lose coverage 

The American Recovery and Reinvestment Act (ARRA) provided a COBRA premium reduction for eligible 

individuals who were involuntarily terminated from employment through May 31, 2010. Individuals who qualified on 

or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for 

another group health plan or Medicare. Those individuals who qualified for the premium reduction were only 

required to pay 35 percent of the COBRA premium otherwise due to the plan. If your COBRA continuation 

coverage lasts for more than 15 months, you will need to pay the full amount to continue your COBRA 

continuation coverage. 

 Make sure you know when your 15 months of premium assistance ends and how much you need to 

 pay to continue your coverage 

If you are unsure about the correct ending date or the amount of the full premium, contact your plan right away so 

that you can make sure you pay the correct amount for the correct time period. Plans are not required to remind 

you or bill you for the increased amount and not making the full payment within the correct time period can result in the 

cancelation of your COBRA coverage. 

 Make sure you pay the full premium for coverage after the first 15 months 

It is very important to pay the remaining 3 months of COBRA at 100% of the premium amount if at all possible, 

as you lose some health coverage rights or options if your COBRA is terminated for non-payment. Individuals 

who exhaust their COBRA are generally eligible to obtain coverage through state high risk pools and also qualify 

for special enrollment in a new employer’s plan or spouse’s plan. These rights are lost if an individual’s COBRA 

is terminated for non-payment. (Note: If a person becomes eligible for coverage in a new employer’s plan or spouse’s plan, 

they lose eligibility for the subsidy and are required to notify their COBRA provider of their eligibility for the other coverage.) 

 Check for other coverage options 

If you did not make the premium payment on time and your coverage was canceled, you may want to contact 

your plan and ask if they will reinstate your coverage. However, if your coverage was terminated for not making 

the payment within the grace period, the plan is not required to reinstate your coverage. If you believe your coverage 

was canceled inappropriately, please contact an EBSA Benefits Advisor at 1-866-444-3272 for possible assistance. 

If you have lost coverage, and are not eligible to enroll in a new employer’s plan or a spouse’s plan, you may want 

to contact your state department of insurance to get information about obtaining an individual policy. You may 

be able to cover your children under your state’s Children’s Health Insurance Program- call 1-877 KIDS NOW

(1-877-543-7669) or go to www.insurekidsnow.gov to find out about eligibility and enrollment. 

Additionally, the Affordable Care Act provides that plans or issuers that make available coverage to 

dependent children must make such coverage available for children up to age 26. Because this provision has 

a varying applicability date, contact the plan to see if such coverage is available. The Affordable Care Act also 

established Pre-existing Condition Insurance Plans (PCIP) for those with pre-existing conditions. For 

information about how these plans work, go to www.healthcare.gov. 

If you have limited income and resources (assets), you may want to contact your state to determine if you are 

eligible for Medicaid or other programs that may assist you in obtaining assistance with health coverage.