The Effect of the Stimulus Package on COBRA
The $787 billion American Recovery and Reinvestment Act of 2009 (generally known as the economic stimulus package) signed into law by President Barack Obama on February 17, 2009 significantly impacts employer obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and similar state laws.
The ARRA requires new notices to be provided to COBRA-eligible beneficiaries who were involuntarily terminated from their employment between September 1, 2008 and December 31, 2009, and reduces the amount employers can charge qualified beneficiaries who elect COBRA continuation coverage. The new provisions also apply to the dependents of those employees.
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