COBRA Subsidy Update

Department of Labor (DOL) has updated its COBRA Subsidy website.  Added to the resources already available are the IRS Notice 2009-27 and an expanded FAQ for employers with new Q&As on the model notices. image

In case you missed it, here’s a recap on of the major COBRA changes:

The American Recovery and Reinvestment Act of 2009 (ARRA), provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009, and lasts for up to nine months for those eligible for COBRA during the period beginning September 1, 2008, and ending December 31, 2009, due to an involuntary termination of employment that occurred during that period. The TAA Health Coverage Improvement Act of 2009, enacted as part of ARRA, also made changes with regard to COBRA continuation coverage.

You may also want to review our previous posts on this issue, beginning with Tim Snyder’s Guidance for Employers on the New COBRA Subsidy. Delaware employers, of course, can learn first-hand about the changes at our Annual Employment Law Seminar, on April 29, 2009.

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