April 10, 2009
Question of the Week: Are Employees Covered under Cal-COBRA Eligible for the ARRA Subsidy?
Filed under: News
Vision Payroll

This week’s question comes from Renai, an office manager. We don’t have enough employees to be covered under federal COBRA laws. We are covered by Cal-COBRA. Are employees covered under Cal-COBRA eligible for the ARRA subsidy? Answer: Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntary terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for assistance provided. Cal-COBRA is a California law that applies to employers and group health plans that cover from 2 to 19 employees. Eligible employees may elect to continue their coverage for 36 months. Since ARRA applies to both federal COBRA and similar state laws, the California EDD recently confirmed that employees who have elected Cal-COBRA coverage who meet the ARRA requirements are eligible to receive the subsidy. Contact Vision Payroll if you have any questions on Cal-COBRA.


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