Skip to main content
Find a Lawyer
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Find a Lawyer

More Options

New COBRA Premium Subsidies: Employers Must Notify Ex-Employees

By Caleb Groos | Last updated on

The American Recovery and Reinvestment Act of 2009 (ARRA) added important COBRA benefits for laid off workers. Instead of the ex-employee needing to pay the full cost of COBRA coverage, now, the federal government will now subsidize 65% of COBRA premiums for up to nine months. By April 18, employers must notify some previously laid off employees of their potential COBRA premium reduction.

Under ARRA, individuals involuntarily terminated between last September 1 and the end of this year may qualify to pay only 35% of the cost of COBRA coverage. The remaining 65% is to be covered by employers, who then can claim the amount covered as a rebate on their 2009 income tax return.

Employers are required to notify COBRA eligible beneficiaries regarding possible premium reduction, whether or not they are currently enrolled in COBRA coverage.

As reported by the San Francisco Chronicle, those who previously declined COBRA coverage will also have another chance to enroll. By April 18, employers must provide notice of the premium reduction plan to employees who were let go between September 1, 2008 and February 16, 2009 and who either declined or are no longer enrolled in COBRA coverage.

To assist employers, the Department of Labor released model notices of the ARRA COBRA reduction benefits.

  • COBRA Continuation Coverage Assistance (U.S. Dept. of Labor)
  • Model Notices re COBRA Premium Reduction (U.S. Dept. of Labor)
  • IRS Info on COBRA Health Insurance Continuation Premium Subsidy (I.R.S.)
  • COBRA Coverage FAQ (FindLaw)
  • Stimulus bill gives relief to unemployed workers paying for COBRA health insurance (Dallas Morning News)
Was this helpful?

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:
Copied to clipboard