COBRA, ARRA and IT

A rash of calls recently from clients with a common question brings about this post.

If you have an employee who does not return to work after a leave of absence, and that employee is considered terminated from employment when that occurs, then the employee is entitled, according to the U.S. Department of Labor, to elect the COBRA premium subsidy as provided by the ARRA.

And yes, IRS Notice 2009-27 does state, "An involuntary termination means a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services." While the "willing and able to continue performing services" appears to conflict with a situation facing an employee who does not return from a leave of absence, nonetheless, the employee is an assistance eligible individual.