Employees Covered By State Mini-COBRA Plans Eligible for ARRA Subsidy

March 22, 2009

Client Question: How will the ARRA affect groups under 20 employees covered by the State Mini-COBRA plan?
AnswerUnder Title III of the new American Recovery and Reinvestment Act of 2009 (ARRA), “assistance eligible” employees are entitled to a 65% subsidy for COBRA premiums for up to nine months. An assistance eligible employee is one who is (1) eligible for COBRA coverage, (2) elects such coverage, and (3) was involuntarily terminated from employment at any time on or between September 1, 2008 and December 31, 2009.

The Act defines “COBRA continuation coverage” as “coverage provided pursuant to [COBRA] or under a State program that provides comparable continuation coverage.” (emphasis added) It does not include coverage provided through a health flexible spending arrangement under a Section 125 cafeteria plan

Subsequent government publications have confirmed that that the extended COBRA benefits and subsidies under the American Recovery and Reinvestment Act of 2009 does in fact cover employers with fewer than 20 employees who are subject to a State program that provides coverage comparable to COBRA.

 

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One Response to “Employees Covered By State Mini-COBRA Plans Eligible for ARRA Subsidy”

  1. John Trimble Says:

    I live in Lansing Michigan. My employer does not offer COBRA because they employ less than 20 people. I need medical insurance. What kind of State (mini Cobra) programs is this following comment referring to “the American Recovery and Reinvestment Act of 2009 does in fact cover employers with fewer than 20 employees who are subject to a State program that provides coverage comparable to COBRA”

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