To be eligible for the tax subsidy you must have involuntarily lost your job between Sept. 1, 2008 and Dec. 31, 2009.

Starting March 1, 2009, former employees and their families need only pay 35% of the full COBRA premium. The federal government will provide the employer with a tax credit to pay for the other 65% of the full COBRA premium. (Note: the COBRA premium is NOT the active employee contribution rate paid during the severance period.). The subsidy is not available for COBRA benefits before March 1, 2009.

Official Notices to eligible individuals will be mailed by April 18, 2009. The U.S. Dept. of Labor has until March 19, 2009, to issue guidance on the language in the Official Notice. Once the Official Notice is issued, eligible individuals have 60 days to make an election to accept the tax subsidy.

If you elect the tax subsidy it will be retroactive to March 1, 2009, or the first of the month following the loss of your job if later. If you previously declined COBRA coverage or elected COBRA and subsequently dropped COBRA coverage before March 1, 2009, you will be permitted to reenroll effective March 1, 2009, provided you meet all of the other requirements. This means that you may have a gap in coverage.

The tax subsidy ends the earlier of:

	After 9 months.
	When the individual is no longer eligible for COBRA.
	When the individual becomes eligible for another group health plan. If you become eligible for another group plan, you may continue in COBRA at your own expense. You must notify us if/when you become eligible for another plan. You may be subject to a tax penalty if you fail to give us notice.

The tax subsidy is not available for employees terminated for gross misconduct or employees that voluntarily resign. The subsidy is not available for individuals entitled to COBRA for other reasons such as divorce, loss of dependent status, death, or reduction of hours.

The tax subsidy is phased out for people whose adjusted gross income is in excess of $125,000 (if filing single) or $250,000 (if filing a joint return) and is not available for people whose adjusted gross income is in excess of $145,000 (if filing single) or $290,000 (if filing a joint return). If the subsidy is provided to an individual over the income threshold, the individual will be required to repay it to the IRS when they file their taxes.