Economic Stimulus Plan & it's Impact on Your Business

The Economic Stimulus Plan: Its Impact on Your Business

This site is dedicated to helping you understand the most recent economic stimulus plan and how it could impact your business and your employees.

Do you have questions about President Obama’s economic stimulus plan? The American Recovery and Reinvestment Act of 2009 is a broad piece of legislation which impacts individuals, businesses and government agencies. For more information, go to whitehouse.gov and search for American Recovery and Reinvestment Act of 2009 and other important Economic updates that impact your business.


COBRA Update – 4/28/10 - CHANGE IN REQUIREMENTS FOR NEW ELECTION NOTICES - COBRA PREMIUM SUBSIDY TEMPORARILY EXTENDED THROUGH MAY 31, 2010

  • New Election Notice requirements noted in third point of COBRA Update - 4/20/10 below

COBRA Update - 4/20/10 - COBRA PREMIUM SUBSIDY TEMPORARILY EXTENDED THROUGH MAY 31, 2010

  • On Thursday April 15, 2010, the subsidy period was once again extended when President Obama signed into law the “Continuing Extension Act of 2010” (HR 4851) which provides an extension of the COBRA premium subsidy through May 31, 2010. The subsidy amount remains at 65% of the applicable premium and is still available for a maximum of 15 months.

The enactment of HR 4851 results in the following:

  1. Individuals who experience(d) a loss of coverage due to an involuntary termination occurring on or after September 1, 2008 and on or before May 31, 2010 are eligible for the subsidy.
  2. Individuals who lost coverage due to a reduction of hours on or after September 1, 2008 and who are subsequently involuntarily terminated from employment on or after March 2, 2010 and on or before May 31, 2010 are eligible for the subsidy. These individuals must be notified of their subsidy eligibility within 60 days of the involuntary termination regardless of whether or not they elected COBRA based on the reduction of hours qualifying event. COBRA coverage elected based on the involuntary termination event is effective as of the first coverage period following the involuntary termination. HOWEVER, the 18-month COBRA coverage period is measured from the reduction of hours event. Consequently a gap in coverage may exist between the dates of the reduction of hours and involuntary termination qualifying events. The 15-month subsidy period is measured from the involuntary termination event.
  3. An individual who experiences a qualifying event that is termination of employment on or after April 1, 2010 and prior to April 15, 2010 and who has previously been provided an Election Notice not containing the HR 4851 provisions (extension of subsidy through May 31, 2010) must be provided a new Election Notice and new 60-day election period. This notice must be provided within the required timeframe for providing a COBRA Election Notice. COBRA coverage elected and paid will be effective as of the termination of employment qualifying event date. However, only those individuals who lose coverage due to an involuntary termination are eligible for the COBRA premium subsidy. Individuals who are now eligible for the subsidy and had previously paid for a subsidy eligible period (e.g. April of 2010) in fully may be entitled to a refund or credit.

In response to this legislation, ADP is working to accommodate these changes. ADP will continue to monitor legislative guidance regarding the American Recovery and Reinvestment Act as it becomes available. Check back often for updates regarding other components of the legislation or subscribe to our RSS feed for updates.

COBRA Update - 12/24/09

  • On December 19, 2009, the Department of Defense Appropriations Act of 2010 (HR 3326) was signed into law by President Obama. As a result of the enactment of this legislation, the Consolidated Omnibus Budget and Reconciliation Act (COBRA) premium subsidy provided under the American Recovery and Reinvestment Act of 2009 (ARRA) has been extended. HR 3326 extends the duration of the subsidy from nine months to 15 months and extends the deadline for eligibility from December 31, 2009 to February 28, 2010.

    In response to this legislation, ADP is working to accommodate these changes. As we take action to make our client’s HR experience better, we will continue to notify clients accordingly.

    For more information on the COBRA ARRA premium subsidy provisions, please see ADP Tech Flex.
  • In response to a large number of questions received regarding eligibility for the COBRA premium reduction under current law, The Employee Benefits Security Administration updated the COBRA page, www.dol.gov/COBRA , to add new FAQs at http://www.dol.gov/ebsa/faqs/faq-cobra-arra.html . Visitors are encouraged to subscribe to the COBRA page for updates.
  • The stimulus plan includes changes to the way COBRA assistance is provided to employees. Click here to learn more on COBRA changes.

Tax Credit Incentive Update - 3/5/09

  • The stimulus plan includes a variety of changes and additions to tax credit/incentive programs, such as the Work Opportunity Tax Credit program. Click here to learn more.

Making Work Pay Tax Credit Update - 3/4/09

Expanded Earned Income Tax Credit (EITC) Update - 3/3/09

Commuter Benefit Update - 2/25/09

ADP will continue to monitor legislative guidance regarding the American Recovery and Reinvestment Act as it becomes available. Check back often for updates regarding other components of the legislation or subscribe to our RSS feed for updates.

The Rules Are Constantly Changing
The legislative landscape surrounding HR, payroll, taxes and employee benefits is evolving at a rapid pace. You could spend the next several years trying to develop the in-house expertise to catch up with these compliance challenges, or you could partner with an organization today that already has the knowledge and experience necessary to navigate these complex issues.

As your business partner, ADP is committed to assisting you with compliance so you can focus on your core business.

The information on this site is provided solely as a courtesy and should not be construed as legal advice. Your legal counsel should be consulted for updates on law and guidance that may have an impact on your organization and the specific facts related to your business.