12 TortSource 1 (2009-2010)

handle is hein.journals/tortso12 and id is 1 raw text is: Vol. 12, No. 1

COBRA Subsidies under the
Recovery Act: Bridging the Gap
Sacha Steinberger
'i ie nation's unemployment rate nears 10 percent, terminated and unemployed
-r.(s' access to health care is increasingly precarious. On February 1-7, 2009,
kresicdt Barack Obama signed the American Recovery and Reinvestment Act of
2009 (Recovery Act), Pub. L. No. 111-5, which contains a host of potential eco-
nomic stimulus measures. Among those is a temporary COBRA premium subsidy
for eligible terminated employees that provides critical monetary assistance for peo-
ple who are out of work. An overview of the basic provisions of the subsidy as set
forth by the Recovery Act, IRS Notice 2009-27 (April 1, 2009), and the Department
of Labor is offered here.
Under the Recovery Act, employees involuntarily terminated between September
1, 2008, and December 31, 2009, and their qualified family member beneficiaries
are eligible for a subsidy of 65 percent of their COBRA premiums for a period of up
continued on page 6

Enp yee Becn :ei : Funded
Tihrouigh Trusts:
AN w Critplt
Nancy Pridgen
he Employee Retirement Income Security Act of 1974, 29 U.S.C.  1001--1462,
the statute governing employee benefit plans, requires employers to fund pension
lns through a trust. Employers can choose, but arc not required, to set up a trust
to fund any health and welfare benefits they provide. Many employers recognized
the potential for a conflict of interest when the same entity responsible for the
direct funding of a plan also decides claims for benefits to be paid from the plan
and attempted to sidestep the problem by using trusts. As the law developed before
2008, many circuits around the country likewise had come to acknowledge that
using a trust provided an additional layer between those responsible for determin-
ing benefit claims and those responsible for funding the benefits, at least partially
ameliorating concerns about a structural conflict. But then the U.S. Supreme Court
issued its decision in MetLe v. Glenn, 128 S. Ct. 2343 (2008), which now requires
continued on page 4

Fall 2009

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