COBRA subsidy provides worker planning choices

May 17, 2009

One of the first provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) to become effective was the nine-month, 65 percent subsidy for COBRA premiums for eligible COBRA qualified beneficiaries (called “assistance eligible individuals” or AEIs). Unlike many of the other provisions of ARRA, the stimulus benefit of this provision flows to individuals, not employers or businesses. While the federal government ultimately pays for the 65 percent COBRA premium subsidy, employers serve as the delivery mechanism for providing the benefit to individuals and bear the initial cost and administrative burden of providing the benefit.

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