The federal government will subsidize 65 percent of the cost of health insurance through COBRA for workers who lost their jobs between Sept. 1, 2008 and Dec. 31, 2009.
The provision was included in the economic stimulus package signed into law Feb. 17. The Consolidated Omnibus Budget Reconciliation Act, enacted in 1985, currently allows individuals to retain their company insurance coverage for up to 18 months after they leave their employer. Individuals who elect COBRA coverage pay both the employee’s and the employer’s share of the premiums, plus a 2 percent administrative charge.
Business groups are relieved the final stimulus bill didn’t include a broader expansion of COBRA. The original House bill would have allowed former employees who are 55 or older, or who have been with a company for 10 years, to receive health coverage through COBRA until they are eligible for Medicare at 65.
Business groups said covering this age group through COBRA would have cost employers more than what the former employees would have paid for it, especially since individuals 55 and over tend to have more serious health issues than younger workers.
For more information about COBRA, see www.dol.gov/dol/topic/health-plans/cobra.htm .
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