Stimulus Changes COBRA Coverage

In the recently approved and signed economic stimulus package, the American Recovery and Reinvestment Act (ARRA) makes a number of changes affecting employee health benefits. Most notably, the expansion of COBRA, including any state continuation laws applicable to employers with fewer than 20 employees.

The new COBRA rules create a 9-month, 65% federal subsidy of COBRA premiums for certain covered employees who were, or will be, involuntary terminated during the period of September 1, 2008 to December 31, 2009.