On February 17, 2009, President Barack Obama signed into law the
American Recovery and Reinvestment Act of 2009 (the
"Act"). Among other changes, the Act helps individuals
who are out of work to pay for health care continuation coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). Below is a summary of the major changes to
COBRA. We expect the federal government to soon issue further
guidance regarding the implementation of certain aspects of the
law, and we will inform you of these developments.
Premium Assistance for COBRA Continuation Coverage
For a period of up to 9 months, an eligible individual who
elects health care continuation under COBRA is required to pay only
35% of the monthly premium cost and is entitled to a subsidy for
the remaining 65% of the premium. The Act requires employers to pay
the 65% subsidy amount on a monthly basis to the insurance carrier,
but they are entitled to reimbursement of this amount from
