COBRA health insurance subsidy may be extended
Posted on 06 October 2009
Permanent URL of this article: http://retirementrevised.com/money/cobra-health-insurance-subsidy-may-be-extended
The Obama Administration may propose an extension of the federal subsidy of COBRA health insurance benefits for laid-off workers.
COBRA is the federal law that allows workers to hold on to their health insurance benefits after a job loss. Under normal circumstances, coverage typically is available for 18 months but at a steep price: the former employee usually pays 100 percent of the premium plus a 2 percent administrative fee. The coverage is expensive but can be an especially important option for individuals who may not be able to obtain new coverage due to preexisting conditions. The coverage gap issues are especially acute for older workers who may have been forced into premature retirement due to the economic turmoil but are too young to obtain Medicare coverage (age 65).
Under the economic stimulus act passed earlier this year, the federal government pays 65 percent of COBRA premiums for up to nine months. This week, White House officials indicated they are considering an extension of the benefits as part of a broader set of steps aimed at bolstering the safety net for unemployed workers. That came in the wake of more bad news on the jobs front last week; The U.S. Labor Department said employers cut more jobs in September than in August.
No details Details on the possible COBRA extension are here. –for example, whether current recipients of the subsidy would be able to keep it longer, or if eligibility to sign up might be extended. Right now, the subsidy applies only to workers who lose their jobs between Sept. 1, 2008, and Dec. 31, 2009.
Click here for more background on the COBRA subsidy, including a COBRA resource page.
The new federal subsidy will cover 65 percent of premiums for nine months.
October 14th, 2009 at 10:07 am
Regarding the extension of Cobra benefits. Do we just wait to hear news?
October 14th, 2009 at 10:15 am
Steve,
Here’s the latest I’ve been able to find; it’s still under consideration.
http://www.hartfordbusiness.com/news10535.html
October 19th, 2009 at 4:08 pm
Mark,
Quick question. I realize that the subsidy applies to those who lose their jobs through the end of 2009. Does this mean that if someone lost their job in Dec. 09, that they could potential receive 9 months subsidy through Sept. 2010?
Bob
October 22nd, 2009 at 10:57 am
Hey, Bob -
First, if you’re laid off by Dec 31, 2009, you receive subsidized COBRA for 9 months beyond that. Then, if a new extension were approved, you could get an additional 9 months.
To clarify, the Dec 31, 2009 represents the date you must be terminated by to qualify for the first round of subsidized COBRA; it does not represent the date that the first round of subsidies ends.
Claire
October 23rd, 2009 at 6:59 am
any additional news on extension of subsidy for the unemployed and health insurance? My 9 months ends in December and I am still unemployed and need additional help until I find a job
October 23rd, 2009 at 7:27 am
Vicki, unfortunately there has not been any action on this idea yet in Congress. I’ll be posting something as soon as something does happen, however.
Here’s a recent story on the subject from Minnesota Public Radio:
http://minnesota.publicradio.org/display/web/2009/10/21/cobra-insurance-benefits/
November 5th, 2009 at 9:27 am
My husband has been unemployed for 8 months now. My family of 4 will also lose the premium subsidy on Dec 1. The premium jumps to $1280/month and we can’t afford that. Mark, who could we email/petition to emphasize how many people this loss could affect??
November 5th, 2009 at 9:47 am
Alison: How about your representatives in Congress? See: http://retirementrevised.com/money/how-cobra-subsidy-would-be-extended-under-sestak-bill
November 6th, 2009 at 9:20 pm
My Cobra subsidy will also expire soon. On December 1st I will need to pay $572 a month to continue my Cobra without the subsidy. I certainly can not afford that on unemployment. I have found some temporary work, however, no benefits, and does not pay even as much as unemployment does. I sent an e-mail to both the senators from my state and to my congress person asking them to support this subsidy. I am hoping I get a job with benefits soon, but after 9 months it is hard to remain positive.
November 19th, 2009 at 12:46 pm
The “lets hurry and wait” is coming on us very quickly. Next month I start to pay $500 a month. Let the Senator’s and Reps fight over the 898 billion dollar Health Plan all they want, just don’t make us suffer out here. If this extension doesn’t move forward can you imagine what the foreclosure’s on homes will look like, and the bankruptcy’s that will take place, so “we” can have insurance for our families???
November 22nd, 2009 at 12:49 pm
I e-mailed my elected Senators and Reps from my state and got nothing but lip service about how important health care reform is, but NO MENTION WHATSOEVER about the fate of this subsidy extension. It likely won’t pass. That’s just great. Bail out the very institutions that got us into this mess (the banks), but forget the MILLIONS of unemployed Americans who NEED help to afford health insurance until (or IF) they can become re-employed. I know corporate America is fighting to kill the COBRA subsidy, and will likely win.
November 22nd, 2009 at 1:46 pm
I am probably going to be laid off right after the new year. How can I find out if the cobra subsidy is extended to those who are laid off after 12.31.09?
December 25th, 2009 at 10:17 pm
has cobra been extended resently for an addittional 4 months?
Thank You
January 8th, 2010 at 3:59 pm
We are stuck in a nightmare limbo. We cannot get COBRA because we supposedly qualify for a more expensive retiredment package, yet my husband did not retire, he was laid off. We are gettin pingponged back and forth. The only answer we seem to get is if he was 55, he would qualify for the subsidized COBRA. Can anybody give me an idea of someone that could be an advocate for us?? We are desperate! Thank you so much.
January 8th, 2010 at 4:10 pm
Cindy,
A good start is the Department of Labor’s free hotline: 866.444.3272. Also check this page of resources: http://retirementrevised.com/money/how-to-cope-with-cobra-subsidy-uncertainty