Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
The Internal Revenue Service (IRS) has issued Notice 2009-27, which provides guidance on the COBRA premium subsidy that was created under the American Recovery and Reinvestment Act of 2009 (ARRA), or stimulus package. ARRA, among other things, includes a provision that authorizes a 65 percent federal subsidy for continuing health care coverage under COBRA for employees who qualify as “assistance eligible.”
The IRS guidance provides 27 pages of detailed questions and answers on issues including who qualifies as an assistance eligible individual, what constitutes an involuntary termination for purposes of the definition of an assistance eligible individual, how to calculate a premium reduction, and which types of coverage are suitable for premium reductions, among other topics.
For more information on the IRS guidance, see Littler’s ASAP: IRS Clarifies Key Provisions of the New COBRA Subsidy by: Nancy L. Ober.