What Employers Need to Know about the new COBRA Law

Individuals covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA), which provides continued health coverage to individuals who have lost their jobs (either due to job loss, relocation, etc), will get a big helping hand from the government in the form of a federal subsidy. Effective February 17th, 2009, certain individuals eligible for continued medical coverage under COBRA or similar state laws will now receive a federal subsidy of 65% of their premiums. Only those who have lost their medical coverage due to involuntary termination from employment (other than for gross misconduct) between September 1st 2008 and December 31st 2009 are eligible for the subsidy. For employers, the federal subsidy will cover only the costs actually payable by the employee and does not affect the employer’s contribution to the premium.  However, employers might need to contact employees who might be eligible for this program. For more information on the subsidy, check out this great FAQ page set up by Klein Zelman Rothermel, LLP.