COBRA is playing a key role in the economic stimulus proposals being contemplated by Congress.

Under discussion is a provision to allow individuals, age 55 or older, to remain on COBRA until Medicare entitlement, or other employer coverage is procured. Also being considered is a provision that would allow an employer’s employees, who have been employed for at least ten (10) years, to retain COBRA until Medicare entitlement, or other employer coverage is procured. Another provision under consideration is a federal subsidy of up to 65% of the COBRA premium for a period of nine (9) to twelve (12) months for individuals who lose their jobs from September, 2008, through December, 2009.

How these COBRA provisions will play out remains to be seen. Stay tuned for further developments.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.