What are the main COBRA requirements of the Stimulus Plan?
The Stimulus Plan makes two major changes to COBRA’s continuation coverage requirements. First, it creates a federal COBRA premium subsidy for covered employees who are involuntarily terminated from their jobs between September 1, 2008 and December 31, 2009, and those employees’ qualifying dependents, provided those individuals otherwise are eligible for continuation coverage during that period. The subsidy will cover 65% of the premium for coverage for up to nine months with respect to premiums paid for periods of coverage on or after March 1, 2009. Second, the Stimulus Plan creates new notice requirements and special election rights for certain individuals. The Stimulus Plan also permits employers, at their election, to permit individuals eligible for the special subsidy to elect a different health coverage option from the one in which the individual was enrolled at the time of termination of employment. The Stimulus Plan also extends COBRA benefits for certain covered employees who
