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With businesses making difficult choices on how to handle their employees through this COVID-19 crisis, another issue which needs to be considered is continued health benefits.

Although some business owners may wish to furlough their employees but continue to pay for their healthcare coverage, doing so may be in violation of insurance plan requirements, in addition to possibly violating COBRA and ERISA laws. Please be sure to review your healthcare plan documents so as to understand any restrictions.

After the 2008 financial crisis, the American Recovery and Reinvestment Act of 2009 was signed into law by then President Obama. Available temporarily from September 2009 through May 2010, the ARRA made COBRA coverage more affordable to terminated workers by offering a COBRA premium subsidy of 65%. I would venture to guess that the Trump administration will also be addressing this.

The National Law Review explains this issue in more detail.


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