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February 11, 2009
Senate OKs Economic Stimulus Bill with Several HR Provisions

The U.S. Senate has voted 61 to 37 in favor of an economic stimulus package that contains several HR-related provisions, including a subsidy for laid-off workers' COBRA premiums.

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The legislation would provide a 50 percent COBRA premium subsidy for eligible laid-off workers for 12 months. Employers (or health plans if they administer COBRA benefits) would receive a credit against payroll taxes.

The legislation would also suspend temporarily federal income tax on the first $2,400 of unemployment benefits per recipient. In addition, the legislation would increase unemployment benefits by $25.The proposal would also maintain the federal extended unemployment benefits program (which provides up to 33 weeks of extended benefits) through December 2009.

The legislation would also make the tax-free commuter benefit employers can provide for transit and parking the same. The legislation would set both the parking and transportation benefits at $230 per month for 2009 and index them equally for 2010. Under current rules, the amounts of employer-provided transportation benefits that may be excluded from gross income are $120 per month for transportation benefits and $230 per month for parking.

The House passed an economic stimulus package in late January. Before the legislation can go to President Obama's desk, House-Senate negotiators must iron out the differences between the bills. The House version of the economic stimulus package, for example, has a 65 percent subsidy for COBRA premiums.

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