The new American Recovery and Reinvestment Act of 2009 (“ARRA”) provides reductions in premiums and additional opportunities to elect continued group health coverage under COBRA for employees who became eligible for COBRA coverage as a result of an involuntary termination of employment between September 1, 2008, and December 31, 2009. The premium reduction and additional election opportunity also apply to members of the employee’s family who were covered under the group health plan at the time of the employee’s involuntary termination.

Due to the complexity in the change of law, including the method and timing of providing notices, it is advised to consult a legal professional; this informational bulletin should not be considered legal advice.

IRS Circular 230 Disclosure: Any U.S. federal tax advice contained in this article is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties, under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed therein. (The foregoing disclaimer has been affixed under U.S. Treasury regulations governing tax practitioners.)

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