The American Recovery and Reinvestment Act of 2009 (ARRA) provides for
premium reductions and additional election opportunities for health
benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985,
commonly called COBRA. Eligible individuals pay only 35 percent of their
COBRA premiums and the remaining 65 percent is reimbursed to the coverage
provider through a tax credit. The premium reduction applies to periods of
health coverage beginning on or after February 17, 2009 and lasts for up
to nine months for those eligible for COBRA during the period beginning September 1, 2008 and ending December 31,
2009 due to an involuntary termination of employment that occurred during
that period. The TAA Health Coverage Improvement Act of 2009, enacted as
part of ARRA, also made changes with regard to COBRA continuation
coverage.
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