When the mammoth American Recovery and Reinvestment Act of 2009 (ARRA) was enacted in February, lots of the details were still fuzzy. Take, for example, the term “involuntary termination” in the section of the economic stimulus law that grants a 65% subsidy for former employees who buy continuation health coverage under COBRA.
Congress and the White House presumably meant the subsidy to go to employees who had involuntarily lost their jobs because of layoffs or plant closings. But the law didn’t say so.
Now the IRS, tasked with clarifying the subsidy language, has defined “involuntary termination.” It turns out, it may not mean what you think it means.
Most people would understand “involuntary” as meaning the employer—not the employee—made the decision to terminate employment.
But according to Ogletree Deakins employment law attorneys Tim Stanton and Brian Black, IRS Notice 2009-27 implies that some employees who initiate their own could still qualify for the 65% COBRA subsidy. Read their analysis of this confusing issue below.
- How to Fire an Employee the Legal Way: 6 Termination Guidelines
- Beware unexpected peril of undoing termination
- When competition might come from within, keep employees honest
- How should we handle layoffs without risking discrimination claims?
- You can punish employees for improperly sharing salary information—in some cases