UBP blog

11/11/2009

House bill could extend Federal COBRA subsidy by 6 months

The House of Representatives introduced a new bill that would extend the ARRA Act’s COBRA premium subsidy 6 months. The bill would also extend COBRA subsidy eligibility to a new group of laid off workers.

COBRA Subsidy Recap:

As you may already know, the government passed a law giving employees who  were  “involuntarily terminated” between September 1, 2008 and December 31, 2009, a 65% COBRA health care premium subsidy.  The COBRA subsidy became available to these Assistance Eligible Individuals (AEIs) March 1, 2009. AEIs could collect the subsidy for 9 months or until their COBRA eligibility ran out, whichever came first.  

If the House’s proposed bill becomes a law, here’s what would happen:

  1. The COBRA subsidy would be available to AEIs for 15 months.
  2. Individuals who were laid off between January 1, 2010 and June 30, 2010 would become eligible for the subsidy.

COBRA subsidy doubles election rate:

In the time since the ARRA Act’s COBRA subsidy became effective, the number of Assistance Eligible Individuals (AEIs) opting for COBRA coverage doubled to 38%. This is a clear message that people want health insurance and will pay for it when the premium becomes more affordable. The Obama administration is currently looking into whether or not the subsidy should be extended. 

As of now, we don’t know if it will be extended or if more workers will become eligible, but you can definitely count on us to keep you posted.

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