The End of COBRA Subsidy As We Know It (Or Is It?)
As part of President Obama’s stimulus plan, ARRA (American Reinvestment and Recovery Act), employees who lost their jobs through no fault of their own were given COBRA assistance to the tune of 65% of the premium so long as their employment ended between Sept. 1, 2008, and Dec. 31, 2009. This means that this benefit is set to expire in 2 weeks, with no relief for those who lose their jobs in 2010.
The good news is that the Extended COBRA Continuation Protection Act of 2009 (H.R. 3930) was introduced to the House by Representative Joe Sestak (D-Pennsylvania).
From The Employment Law Post:
According to Sestak, the new subsidy would extend:
- The total allowable time an individual could receive the COBRA subsidy by six months (from nine to 15 months);
- The subsidy to individuals who are involuntarily terminated between January 1, 2010, and June 30, 2010; and
- Eligibility for traditional COBRA coverage an additional six months (from 18 to 24 months) for individuals who were terminated at the beginning of the recession in 2008.
Under the proposed legislation, individuals who were enrolled in the original COBRA subsidy since February would continue to receive it until at least May 2010.
World at Work provides a chilling look at how the demise of this program would affect individuals:
According to a new report from Families USA, unemployed individuals who are in line to lose the subsidy will see their COBRA premiums rise from $389/month to $1,111/month, which would consume approximately 83% of the average monthly unemployment check.
From what I can tell, HR 3930 hasn’t made a great deal of progress. According to Open Congress, the Bill was referred to the Subcommittee on Health, Employment, Labor, and Pensions.
It’s amazing how slowly the wheels turn. Let’s hope they can get this bill passed before January 1, 2010.
9 Comments on “ The End of COBRA Subsidy As We Know It (Or Is It?) ”
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When do you think this Bill will be voted on and what are the chances of it passing???
Posted on 17. December 2009 at 16:15
As part of the Department of Defense spending bill, a 2-month extension was added to COBRA subsides – http://detnews.com/article/20091216/POLITICS03/912160425/House-passes-COBRA–benefits-aid-for-jobless – and has been passed by the Senate. It is just waiting on the President’s signature.
As part of the Jobs for Main Street Act (the Jobs Bill), an additional 4-month extension for COBRA subsidies was included. The bill included $12.3 billion to extend from nine to 15 months the 65 percent COBRA premium support for individuals who have lost their jobs. In addition, the bill extends eligibility through June 30, 2010; http://edlabor.house.gov/newsroom/2009/12/house-approves-bill-to-create.shtml
Posted on 18. December 2009 at 08:18
Oh…I should have said that the House has passed the Jobs for Main Street Act and is waiting on the Senate to act.
Posted on 18. December 2009 at 08:18
Unless it’s by 12/31/09 it won’t be soon enough. Millions of Americans NEED this bill to pass. Come on reps. Don’t let us ALL down.
Posted on 18. December 2009 at 08:20
I apologize Felecia. I don’t know if I was as clear as I could have been.
Because millions of Americans are set to lose critical support from the 65 percent COBRA premium assistance program, HRM Today readers should know that Congress included an extension as part of a Department of Defense spending bill. Without this extension, some people’s benefits would have expired at the end of this month as noted above.
Now, those already receiving assistance will be able to continue for another five months, up to a total of 15 months. And, the 15-month eligibility in COBRA premium assistance will expand to include those who lose their jobs through February 28, 2010. While the House of Representatives approved a longer extension in a job creation measure, these provisions in the defense bill will be quickly signed into law and immediately help the millions of Americans who depend on this crucial program.
Posted on 18. December 2009 at 12:26
Please post that the bill has been signed by the President as soon as that happens. My husband’s job ends on
December 31, 2009 but our COBRA coverage does not begin until January 1, 2010, so we still do not know for certain
whether we will be eligible for the subsidy. (If we do not qualify for the subsidy then we cannot afford the COBRA.)
Posted on 21. December 2009 at 16:05
Yes, I am hoping that the eligibility for the 65% COBRA assistance extends to Feb 2010, is the President scheduled to sign this Defense Bill before Christmas ?
Posted on 22. December 2009 at 13:44
This is all very confusing. I’ve been getting emails from Rep. Joe Sestak, sponsor of H.R. 3930 – Congress’ version of this bill. I wasn’t aware of the DoD bill, or ht Jobs for Main Street bill either (is this the Senate version?). I’m one of those who was taking advantage of the 65% subsidy from the beginning – technically my benefits ran out end of November. I’m gambling that one of these bills passes, but time is crucial… Please post when any of these bills becomes law, and please spell it out what it means for us. Thanks.
Posted on 22. December 2009 at 14:23
1. There’s a movement to radically change California government, by getting rid of career politicians and chopping their salaries in half. A group known as Citizens for California Reform wants to make the California legislature a part time time job, just like it was until 1966
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Posted on 29. December 2009 at 21:23