The American Recovery and Reinvestment Act was signed into law by President Obama Feb. 17. The stimulus package includes numerous elements that directly address some critical employer/employee issues. Many will directly impact the workplace in both the short and long term.

The timeline from the legislation's introduction in Congress through passage and signing, and then to the effective dates of some provisions, seems to break all congressional speed records. Several are already in effect and will require immediate employer action. Like most new laws, ARRA will create more questions than are initially answered.

Regarding COBRA, the Consolidated Omnibus Budget Reconciliation Act, all that glitters is not gold. Since its passage in 1986, this federally mandated benefit has been considered "fool's gold" to most of those eligible for continued health coverage following a job termination. It was shiny, but of little real value. Its cost was mostly prohibitive - up to 102 percent of the full premium for the same coverage they had when they were still collecting a paycheck.

Alchemists have finally had some success in converting base metal to gold. ARRA changes effective as of March 1 address some of these shortcomings:

• A 65 percent subsidy of premium cost is provided to employers through payroll tax credits. Eligible employees need pay only the 35 percent difference. Subsidy-eligible employees are those who were involuntarily terminated on or after Sept. 1, 2008, and previously declined coverage, or those subsequently terminated, through Dec. 31, 2009.

• Employers must take steps to identify all subsidy-eligible employees who were laid off between Sept. 1, 2008, and Dec. 31, 2009, and offer them a special election period.

• COBRA notification forms and letters need to be updated and distributed by April 18, reflecting the changes (models are available at www.dol.gov/ebsa/COBRA.html).

• Employers also need to coordinate with administrators and payroll service providers to implement the systems needed to recoup the federal subsidy.

With the unemployment rate rising nationwide to 8.5 percent in March, we can expect the number of those now electing this option to increase as well.

Another feature of ARRA already in effect is the implementation of the Making Work Pay tax credit of $400 per individual and $800 for eligible joint filers for 2009 and 2010. It's not distributed in one check but through reduced federal withholding from paychecks starting this spring. The IRS has issued new withholding tables to help in the implementation of this provision.

The stimulus package has earmarked billions of dollars to extend funding for the Workforce Investment Act of 1998 and other existing programs that support worker training and re-employment services. These monies will give states grants for adult and youth employment, training for dislocated workers and high-school dropouts enrolled in alternative schools, and re-employment services for unemployment-insurance claimants.

Additional provisions include programs of competitive grants for worker training and placement in high-growth and emerging industry sectors; training projects that prepare workers for careers in energy efficiency and renewable energy; and funding to aid in the enforcement of various worker-protection laws.

Many nonprofits may appreciate an extension of funding for the Older Americans Act of 1965 to foster the "Community Service Employment for Older Americans" program. This may be helpful to organizations that wish to use the services and experience of retired workers.

The executive-compensation provisions have recently become a political firestorm. The more than $165 million AIG allotted in "retention" bonuses included some for workers who were subsequently "unretained." Now we learn that bonuses are planned for more than 7,000 employees of Freddie Mac and Fannie Mae - organizations whose problems started it all.

ARRA puts limits on executive compensation for those firms who have received funds under the Emergency Economic Stabilization Act of 2008 (TARP.) Such limits include incentive compensation and "golden parachutes" to the senior executive as well as the next 20 most highly compensated employees. A specific prohibition bans "paying or accruing any bonus, retention award, or incentive compensation," with some exceptions, during the period of TARP obligation.

The feeding frenzy over bonuses arises from a specific provision that exempts any bonus obligation incurred by a valid employment contract executed on or before Feb. 11, 2009. Bonuses are then viewed as an existing liability, like accrued vacation or pensions. Why individual employment contracts are sacred while collective-bargaining agreements are not is a question raised by many.

This issue does highlight flaws in many variable-pay plans, as well as a general lack of understanding about the very concept of performance-based reward systems. When such a plan is good, it's very good; when less than good, it's very bad. Employers need to keep some perspective and not toss the baby out with the bath water. They should instead make certain that payouts of such plans don't separate from measured and positive performance standards.

Provisions extending and changing unemployment insurance have perhaps the greatest impact on those most directly affected by the economic downturn. Some of the more significant features are:

• The first $2,400 of unemployment benefits received in 2009 is tax-free. Normally, unemployment benefits are taxable.

• Existing emergency unemployment-compensation programs receive extended funding, and the benefit periods are broadened for up to 72 weeks of coverage, depending on individual state unemployment rates.

• For states accepting and implementing the ARRA unemployment insurance funding, weekly benefits will increase by $25.

• Incentive payments are available to states to modernize their unemployment-insurance systems. Chief among the "suggested" changes are encouragements to broaden eligibility definitions for voluntary termination to include "compelling family reasons" - spouse relocation, domestic violence, or the illness or disability of a family member. In addition, claimants seeking only part-time employment would be deemed eligible.

Another provision of ARRA limits H-1B alien-worker visas, but only for those receiving TARP monies. How well this and the other provisions of ARRA will work to ease the pain and stimulate recovery, or what their long-term implications will be, cannot be predicted - yet. But we can hope.

Peter Loomis is owner of Loomis Associates, a Buffalo human-resources consulting firm. He can be reached at pcloomis@roadrunner.com.