December 2, 2009 —Yesterday marked the beginning of the end of the COBRA subsidy contained in the stimulus bill passed in March. Assistance eligible individuals who began receiving the subsidy the first day it was available saw their subsidy end on December 1, as the subsidy was only for nine months of COBRA coverage. Employees who become eligible for COBRA coverage between now and December 31 are still eligible to receive the subsidy for the full nine months however.
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.
Many in Congress and the Administration are interested in extending, and possibly expanding, the subsidy program. In the Senate, Sens. Bob Casey (D-PA) and Sherrod Brown (D-OH) have introduced the COBRA Subsidy Extension and Enhancement Act of 2009. According to Sen. Casey’s website, the bill would extend the number of months the subsidy was available to 15; apply to individuals that were involuntarily terminated between January 1, 2010 and June 30, 2010; and be available to workers whose hours are cut to the extent that they are no longer eligible for employer sponsored benefits.
In the House, Rep. Joe Sestak (D-PA) introduced the Extended COBRA Continuation Protection Act of 2009. Similar to the Senate bill, Rep. Sestak’s bill would extend the number of months the subsidy was available to 15 and apply to individuals that were involuntarily terminated between January 1, 2010 and June 30, 2010. Unlike the Senate bill, this bill would also extend the number of months regular COBRA coverage was available to workers who had been laid off since the beginning of the recession in 2008 from 18 months to 24 months.
In anticipation of the expiring subsidy and the possibility of an extension, the Department of Labor has already started compiling questions and answers dealing with issues that may arise.
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