Under the American Recovery and Reinvestment Act of 2009, a 65% subsidy for COBRA continuation premiums was available for up to 9 months for workers who were involuntarily terminated between September 1, 2008 and December 31, 2009. Former employees paid 35% of their health insurance premiums, while the former employer paid 65%. The employer was then reimbursed by claiming a credit on Form 941. AGI limitations applied.

The Department of Defense Appropriations Act of 2010 (H.R. 3326, Division B, Section 1010) extends this subsidy to February 28, 2010. The new law also extends the entitlement to the subsidy from 9 months to 15 months. The AGI limitations remain unchanged.