ARRA COBRA Subsidy Set to End As of December 31, 2009

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As employers who have experienced employee terminations within the past fifteen (15) months are aware, the American Recovery & Reinvestment Act of 2009 (“ARRA”) provides a COBRA premium subsidy of 65% for qualified beneficiaries who suffer an “involuntary termination” between September 1, 2008 and December 31, 2009 and who are eligible for COBRA within the same time period and elect such continuation coverage. The question has arisen whether employees who are terminated in December 2009 and are set to begin COBRA on January 1, 2010 are eligible for this subsidy.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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