Reid Puts Together New Bill for COBRA Subsidy Extension, Pension Relief

Business Insurance reports that in its current version, the draft bill would extend the COBRA premium subsidy to involuntarily terminated employees another 10 months, so employees laid off through year-end would be eligible for the 65% subsidy for up to 15 months. The draft bill also would allow employees who first lost group health insurance coverage due to a reduction in hours and then were involuntarily terminated to receive the COBRA premium subsidy, assuming certain conditions were met, according to Business Insurance.

The draft bill contains provisions that would give employers more time to fund their pension plan obligations. Lawmakers and business groups have sought pension funding relief (see Lawmakers/Companies Make Further Plea for Pension Funding Relief) as it is expected that employers will face significantly higher contribution to their plans in the coming years (see DB Sponsors Face Significantly Higher Contributions in 2010).

Business Insurance also reports that the Senate on Thursday may consider H.R. 1586, which among other things, would extend the COBRA subsidy through the end of March since under current rules, employees laid off after March 1 will not be eligible.

Reid previously stripped the COBRA subsidy and pension relief provisions from a jobs bill, the Hiring Incentives to Restore Employment (HIRE) Act, which was approved by the Senate this week (see Reid Splits HIRE Bill into Pieces).