The Continuing Extension Act of 2010, enacted April 15, reinstated the COBRA subsidy, which had expired on March 31, 2010. As a result, workers who are involuntarily terminated from employment between Sept. 1, 2008 and May 31, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months.
Since the subsidy has ended as of May 31, 2010, Employers are no longer required to send out special notices to employees who qualify for the subsidy. Other key points:
The perk lasts for only for 15 months and applies to people who are laid off between September first 2008 and May 31, 2010;
To be eligible annual income cannot exceed $125,000 for a single person and $250,000 for a couples;
65% of existing COBRA premiums are be subsidized by the U.S. Treasury Department, via a refundable tax credit, directly to the COBRA administrators;
If you declined COBRA coverage after September 1st 2008, you will have the option to re-enroll into COBRA with the above subsides;
If you've already started paying for the coverage you won't get any credit for what you've already paid...But you will only be responsible for 35% of the premiums for the next 15 months;
If you voluntarily quit or if you were for some reason terminated for gross misconduct then you're not eligible for the subsidy;
Subsidies will only apply to COBRA premiums and there will be no refund of premiums prior to the effective date of the subsidy;
If you worked for a smaller employer, COBRA only applies to employers with 20 or more employees; and
Subsidies will terminate (along with the COBRA continuation coverage) if the enrollee acquires a new health insurance plan through another employer or is eligible for Medicare.
Studies show the average monthly COBRA premium for individual coverage is about $400 or 30% of monthly unemployment benefits.
If you are still confused about the COBRA Stimulus bill, post your question to the message board, and go over terms
you should know. There is also an ERISA Attorney Directory available for additional advice.
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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