New federal legislation significantly affects the obligations of most employers under COBRA. For your convenience and quick reference, we have summarized key aspects of the new law. It will be important to seek specific guidance for your organization if you terminate employees between now and the end of the year, or have terminated employees since September 1, 2008.

1. The new law applies to large employers (e.g. 20 or more employees) under COBRA, and many small employers in states with "mini-COBRA" laws (e.g. Oregon and California).

2. Employees who are involuntarily terminated (including layoffs) through the end of this year are eligible to have 65% of COBRA premiums paid by the employer, for up to 9 months. This includes dependent coverage.

3. Employees terminated since September 1, 2008 must receive a new COBRA notice offering the 65% subsidy. If these employees or their dependents did not previously elect COBRA, they can do so now. The coverage would be effective back to February 17, 2009.

4. The 65% subsidy applies to premiums owed on or after February 17, 2009.

5. The new COBRA notices must be sent to previously terminated employees by April 18, 2009. Model notices are now available at www.dol.gov/ebsa/COBRAmodelnotice.html.

6. Employers can recoup the 65% subsidy through a reduction in payroll taxes, provided the employee or dependents have actually paid their 35% share of the premiums.

Questions regarding the new law can be directed to any of our attorneys by calling (503) 699-1300.