COBRA Coverage Under ARRA

As part of the enormous stimulus package in the American Recovery and Reinvestment Act of 2009, the federal government included some relief for laid-off employees.

California Labor and Employment Law Blog

Mark Spring discusses the COBRA subsidy in ARRA over at the California Labor and Employment Law Blog: The Stimulus Bill’s Impact on COBRA.

The biggest change to COBRA is a 65% subsidy from the government for certain eligible COBRA participants.  The 65 percent subsidy is advanced by the employer and then recouped by a credit against payroll tax submissions.  The subsidy is available to eligible individuals for up to nine months.


3 Responses to COBRA Coverage Under ARRA

  1. Michael February 23, 2009 at 11:16 am #

    How does the credit work? Currently, we pay the employee’s COBRA payment on behalf of the former employee, and get reimbursed by him. Under the ARRA, do we now begin to collect only 35% from the former employee going forward?

  2. Doug February 24, 2009 at 7:24 am #

    Michael –

    I have not seen any further information on the mechanics of the subsidy. I will share more information as I get it.

    For your specific situation, you should get your own legal advice of benefits vendor to help.

    (As I say in the disclaimers of this blog, I am not dispensing legal advice.)

  3. Michael February 24, 2009 at 9:29 am #

    Thanks. I will keep checking.