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Notice 2009-27 Premium Assistance for COBRA Benefits

Detailed guidance about ARRA in a question-and-answer format was provided by the IRS on March 31, 2009.

Most importantly, "involuntary termination of employment" is defined in the guidance and several examples of involuntary termination are provided. This is important to help employers determine who is eligible for the subsidy and who is not.

In the guidance, the IRS defines an involuntary termination as the independent exercise of an employer's authority to terminate employment when the employee was willing and able to work. The determination of whether a termination is involuntary is based on all the facts and circumstances, not on whether a termination is designated as voluntary or a resignation.

Other topics covered in the guidance include how the premium subsidy is to be calculated when the employer pays part of the premium, whether the subsidy is available to those who continue dental only coverage and the length of the subsidy for employees who are involuntarily terminated several times while the law is in effect.

View the IRS guidance.