The recently enacted economic stimulus law has provisions that dramatically and immediately affect compliance with the continued group health plan coverage requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). In particular, the American Recovery and Reinvestment Act of 2009 (ARRA) includes a 65 percent subsidy for COBRA premiums paid by qualified beneficiaries who lose group health plan coverage because of a covered employee’s involuntary termination of employment at any time from September 1, 2008, through December 31, 2009. The subsidy applies not only to federal COBRA coverage, but also to state-law programs that provide comparable continuation coverage. Therefore, it is important for all group health plan sponsors to learn these new rules and understand their new obligations.
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