Compiled By CityTownInfo.com Staff
December 28, 2009
President Obama has signed a bill which will extend federal COBRA subsidies from nine to 15 months. In addition, the cutoff for the COBRA subsidy eligibility will be extended from December 31 to February 28, 2010.
Under federal law, workers who have lost their jobs can retain their former employers' group health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act, known as COBRA. Normally, COBRA allows former employees to continue the health coverage for as long as 18 months, provided they pay the entire premium plus an administrative fee. The cost can therefore be prohibitively expensive--particularly for those without jobs.
The federal subsidy enacted last February covered 65 percent of the COBRA cost, allowing many to continue their health coverage affordably, but the subsidy was beginning to expire for many. Michelle Singletary in The Washington Post reports that Jeff and Marianne Krebs of Ohio, for example, both unemployed, were expecting their premium to jump from $450 a month to $1,550 beginning in January.
"How can we, as unemployed American citizens, pay these ridiculous premiums?" Jeff asked Singletary in an e-mail.
The Senate passed the legislation on Saturday, December 19, as part of a $636 billion defense spending measure, and word of the subsidy's extension was greeted with relief. "It's just music to my ears," said Julie Ingalls of California, who was quoted in the San Francisco Chronicle. Her subsidy ended in November, when her monthly premiums switched from $141 to over $400.
Others hailed the move as well. "Millions of unemployed Americans and their families will be better able to afford and keep their health benefit coverage because of this new law," said Phyllis Borzi, assistant secretary of the Employee Benefits Security Administration, who was quoted in USA Today.
The Washington Post notes that the extension will also give credit against future payments to people who paid the full premium in December. Those who are eligible for a credit will need to contact their plan administrator or employer.
The Wall Street Journal reports that according to benefits consultant Hewitt Associates, more than 14 million workers are estimated to be eligible for the subsidy.
