In light of the enactment of the American Recovery and Reinvestment Act (ARRA) of 2009, employers have begun re-examining the cases of some employees who were involuntarily discharged for misconduct. The purpose? To determine whether the employees are eligible to receive a 65% subsidy for continuation of health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
The ARRA, commonly known as the Obama administration’s economic stimulus package, provides that such “terminated employees” may be eligible for a COBRA premium assistance subsidy to initially be paid by employers. Under COBRA, however, an employee isn’t eligible to continued coverage if the employee’s discharge was for “gross misconduct.”
But what constitutes “gross misconduct” under COBRA? The statute and associated regulations, as well as IRS regulations, do not define the term, and few court decisions provide any precise de...(register to read more)
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