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Are early retirees eligible for the COBRA subsidy?

by on
in Firing,Human Resources

Q. We recently offered employees the opportunity to participate in an early retirement program, and several employees elected to take us up on the offer. Are they eligible for the new 65% COBRA subsidy?

A.
Whether or not the employees who elected to participate in the early retirement program will be eligible for the COBRA subsidy depends on the program’s specifics. If the program is permanent (not temporary) and the employees did not have any expectation that they would be terminated from employment, the terminations would be considered voluntary, and those employees would not be eligible for the subsidy.

If the early retirement program was part of a planned reduction in force, or if the employees understood that their positions would be eliminated if they did not participate in the program, the terminations would be considered involuntary.

In those situations, if the employees were otherwise eligible for the subsidy, they would be entitled to be treated as eligible for the subsidy.

For information on the COBRA subsidy, see “Feds publish more details on new COBRA subsidy, notices.”

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