American Recovery and Reinvestment Act of 2009: Impact on Executive Compensation and Employee Benefits

Title:
American Recovery and Reinvestment Act of 2009: Impact on Executive Compensation and Employee Benefits
Publication:
Benefits Alert
Attorney:
Practice:

On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009 (the Act). The Act includes a number of provisions that significantly impact executive compensation and employee benefits, including restrictions applicable to an expanded group of companies participating in the Troubled Asset Relief Program (TARP).

Regarding executive compensation, the Act:

Regarding employee benefits, the Act:

- the notice of COBRA continuation coverage must also include notice of the available COBRA premium subsidy;

- certain unemployed workers have an additional 60 days to elect subsidized COBRA continuation coverage;

- COBRA-subsidized persons may elect to change their COBRA continuation coverage to a different plan if permitted by the employer;

- the COBRA premium subsidy is recaptured from high income taxpayers (with a complete recapture when the individual's modified adjusted gross income exceeds $145,000 ($290,000 for joint returns));

- the COBRA premium subsidy is not included in the recipient's gross income;

- an individual receiving a COBRA premium subsidy is not eligible for the health coverage tax credit; and

- individuals denied a COBRA premium subsidy may seek an expedited (15-day) review of the denial from the Department of Labor.

If you have any questions about how these changes may affect your business or personal situation, please contact Jim Karas of Riker Danzig's Employee Benefits and Executive Compensation Group.