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2009 Economic Stimulus Act Introduces COBRA Premium Subsidy for Involuntarily Terminated Employees

Date:
02/25/2009

Source:
Walter W. Miller

Link:

Description:
The recently enacted Economic Stimulus Act introduces a major change to the COBRA health plan continuation coverage rules. Under this new law, employees who are involuntarily terminated from employment during a stated period, and who elect COBRA continuation coverage, are allowed to pay only 35% of their COBRA premiums for up to nine months. The remaining 65% is then initially paid by the employer or the insurance carrier (depending on the type of health plan). The employer or insurance carrier is then eligible for a credit against its federal employment taxes for its share of the premiums. Employees are required to be provided a special notice regarding the premium subsidy. A pdf of an Employee Benefits Alert analyzing the new COBRA premium subsidy rules and their effect on employers can be downloaded below.

Download:
COBRA Economic Stimulus Bill.pdf