McDermott Law, LLC
4600 S. Ulster Street,
Suite 800
Denver, CO 80237

(303) 964-1800


April 24, 2009

The President recently signed into law an economic stimulus package titled The American Recovery and Reinvestment Act. This law may impact your health care and other employee benefits. The plan includes provisions to assist certain eligible jobless workers pay for health insurance under COBRA. COBRA applies to employers with 20 or more employees and, specifically allows newly unemployed workers to keep health insurance provided by their former employers. The new American Recovery and Reinvestment Act makes COBRA coverage more accessible to former employees.

For workers who are involuntarily terminated for reasons other than gross misconduct between September 1, 2008 and December 31, 2009, the federal government will subsidize 65% of the premiums under COBRA for nine months. Additionally, for involuntarily employees who did not sign up for COBRA originally have been granted an additional 60 days within which to do so.

There is a high income exclusion however. If your adjusted gross income exceeds $125,000 per year or $250,000 per family, the income tax will be raised by the premium reduction amount which effectively removes the subsidy.

If you have lost your job involuntarily in this economic downturn, it is possible your rights under COBRA have been impacted. You may want to contact your employer to determine if you have the right to enroll in COBRA healthcare coverage or have the right to seek a subsidy under this new Act.

Categories: Insurance


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