Ready or Not: New Federal COBRA Subsidy Law Requires Prompt Employer Action

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Tax Act of 2009 (the "Act") into law. The Act includes a subsidy for certain qualified beneficiaries who are entitled to COBRAcoverage in connection with an involuntary termination that occurred, or will occur, between September 1, 2008 and December 31, 2009 (the "Program").

Because the subsidy is available for periods of COBRA coverage beginning on or after February 17, 2009, it is important that employers immediately identify the steps they must take to comply with the Act. The following Alert highlights the Program, identifies planning issues employers may wish to consider when employees are being involuntarily severed and recommends next steps for employers to take to comply with the Act.

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