As previously reported, the American Recovery and Reinvestment Act made several important changes to COBRA, which will change the way employers offer COBRA and the way participants can pay for it. The most significant change is that participants involuntarily terminated between September 1, 2008, and December 31, 2009, are now eligible to purchase COBRA for only 35% of the cost and have the federal government pay the remaining 65%. Employers must provide notices to all individuals who became entitled to COBRA coverage between September 1, 2008, and December 31, 2009. Please see our previously issued alerts outlining the new COBRA rules: “IRS Issues Additional Guidance on COBRA Premium Subsidy” (SRZ Alert, April 10, 2009), “New Stimulus Package Creates Subsidy for Health Care Continuation Coverage” (SRZ Alert, March 9, 2009) and “Department of Labor Issues Model Notices for Subsidized COBRA Premiums” (SRZ Alert, March 20, 2009).