<nobr>Feb 17, 2009</nobr>

President Obama Signs Economic Recovery Plan Into Law

President Barack Obama on February 17 signed into law the American Recovery and Reinvestment Act of 2009 (H.R. 1), following the approval by the House and Senate last Friday. The $787 billion economic recovery plan includes various tax incentives for individuals and businesses, authorizes increased spending on health care, education, transportation, and unemployment benefits, and new executive pay restrictions for companies participating in the Troubled Asset Relief Program (TARP).

The new law also includes a premium subsidy for certain eligible individuals for COBRA continuation health coverage, funding for the development of health information technology, and funding for health comparative effectiveness research.

Premium Subsidies for COBRA Continuation Coverage:

• Provides 65% subsidy for COBRA continuation premiums for up to nine months for involuntarily terminated workers and their families.


• Eligible individuals are those involuntarily terminated between September 1, 2008, and December 31, 2009.


• Subsidy would terminate upon offer of any new employer-sponsored health care coverage or Medicare eligibility.


• Workers involuntarily terminated between September 1, 2008, and enactment, but failed to initially elect COBRA will be given additional 60 days to elect COBRA and receive subsidy.


• Subsidy is phased-out for participants with adjusted gross income in excess of $125,000 for individuals and $250,000 for families.


• Includes an income-threshold repayment mechanism for taxpayers with adjusted gross income in between $125,000 and $145,000 for individuals, and $250,000 and $290,000 for joint filers; amount of premium subsidy that must be repaid is determined by income level.


• Dropped: ERIC-opposed House proposal to provide continuation coverage to Medicare eligibility to laid off workers 55 years of age and older and workers with 10 years of service with a company (55/10 provision).

Health Information Technology Provisions:

• Approves $19 Billion in incentives for providers and hospitals to adopt electronic health records.


• Defines breach as an intentional, unauthorized acquisition/access or disclosure of protected health information (PHI), and requires any individual whose PHI has been subject to a breach to be notified within 60 days of discovery of the breach.


• Extends privacy requirements to "business associates," and subjects them to civil and criminal penalties.


• Individuals can audit covered entities/business associates and require them to provide an account of PHI disclosures or transmissions.


• Forbids a wide range of marketing of services by covered entities or business associates based on PHI.


• State Attorneys General can sue in federal court entities accused of having violated provisions of this bill.

Comparative Effectiveness Research:

• $1.1 billion to the Agency for Healthcare Research and Quality, NIH and the HHS Office of the Secretary to evaluate the relative effectiveness of different health care services and treatment options.


• $1 billion for prevention and wellness programs to fight preventable diseases and conditions with evidence-based strategies.

The links below will take you to the various provisions of the bill. The health-information technology and comparative health research provisions are located in Division A, the COBRA health provisions are contained in Division B, and the tax provisions that may also be of interest to the business community are in Division B. For the layperson's description of the various provisions, see the Joint Explanations.

Missed Opportunity for Pension Relief

The compromise failed to include funding relief for defined benefit pension plans. ERIC had met with the House and Senate committees numerous times to press the critical nature of the funding issue since last October when the market collapse first threatened plans that were very well funded only days before.

ERIC continues to press the case for additional funding relief arguing that the funding issues are exacerbated by the accelerated funding requirements imposed by the Pension Protection Act of 2006, which did not contemplate the current economic crisis. The failure to provide relief will result in cash-strapped companies freezing their plans, cutting payrolls, and curtailing 401(k) contributions.

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Division A: Appropriations Title

Division A: Joint Explanation

Division B: Tax, Unemployment, Health, State Fiscal Relief, and Other Provisions

Division B: Joint Explanation

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