The recently enacted economic stimulus bill, titled the American Recovery and Reinvestment Act, includes a federal subsidy for group health plan coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and similar state laws that offer comparable continuation coverage. The subsidy covers 65% of the cost of COBRA coverage for up to nine months of coverage for employees who were involuntarily terminated at any time between September 1, 2008 and December 31, 2009 and their qualified beneficiaries. Qualified beneficiaries are identified as spouses and dependent children of the employee. The subsidy, like COBRA coverage in general, is not available to same-sex spouses or domestic partners since the federal Defense of Marriage Act limits the definition of “spouse” for all purposes of federal law to a person of the opposite sex. However, many employers elect to provide “COBRA-equivalent” coverage to the domestic partners and/or same-sex spouses of employees.
