COBRA Subsidies Under the American Recovery and Reinvestment Act of 2009
The American Recovery and Reinvestment Act (ARRA) of 2009 results in, among other things, substantial amendments to the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Among other things, the ARRA provides that "assistance eligible individuals" ("AEI") are only required to pay 35% of the health insurance premium charged under a plan. Employers are responsible for paying the remaining 65%. However, the employer ultimately receives reimbursement from the government in the form of a credit against income tax withholding amounts and FICA taxes.
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