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Alerts
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Department of Labor Issues Model Notices for Subsidized COBRA Premiums
March 20, 2008
As we recently reported in “New Stimulus Package Creates Subsidy for Health Care Continuation Coverage” (SRZ Alert, March 9, 2009), President Obama on Feb. 17, 2009, signed into law the American Recovery and Reinvestment Act of 2009 (the “ARRA”). The ARRA expands the rights of terminated employees and their eligible beneficiaries under the Consolidated Omnibus Budget and Reconciliation Act of 1985, as amended (“COBRA”). Specifically, the COBRA provisions of the ARRA provide that 65 percent of an assistance eligible individual’s COBRA premiums will be subsidized by the U.S. government. While the employer or other plan sponsor is initially required to front the cost of the subsidy, the government will reimburse the entity by providing it with a credit against its payroll taxes and/or a refund.
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