As part of the enormous stimulus package in the American Recovery and Reinvestment Act of 2009, the federal government included some relief for laid-off employees.
Mark Spring discusses the COBRA subsidy in ARRA over at the California Labor and Employment Law Blog: The Stimulus Bill’s Impact on COBRA.
The biggest change to COBRA is a 65% subsidy from the government for certain eligible COBRA participants. The 65 percent subsidy is advanced by the employer and then recouped by a credit against payroll tax submissions. The subsidy is available to eligible individuals for up to nine months.