Stimulus Bill to Offer Some Help with COBRA Costs
Laid off and trying to make ends meet. Health insurance is no longer covered. To continue getting coverage under COBRA, the laid-off worker must pay 100 percent of the premium. Plus there is a 2 percent administrative fee. Premiums for a typical family policy can easily cost $13,000 a year.
The final draft of the stimulus bill has a small amount of relief in it inending to make COBRA more affordable. There is a provision that provides a federal subsidy of 65 percent of COBRA premiums for up to nine months for workers who lose their jobs. Eligible workers are those who were laid off between Sept. 1, 2008, and Dec. 31, 2009. Ineligible are any workers whose income in the year they would receive it exceeds $125,000 for individuals and $250,000 for families. The Joint Committee on Taxation estimates that 7 million people may be able to keep their health insurance thanks to this provision.
Even with this help, families will still be looking at spending close to $400 a month on health insurance premiums. If the average weekly unemployment insurance check is only about $300, how does that math add up? Even if other provisions in the stimulus bill increases the unemployment check by $25 per week (through 2009), people are going to have to think long and hard about whether they can afford to extend their coverage under COBRA. The mortgage, food, and utilities will come first.
Cut from the stimulus bill was a provision that would have allowed laid off workers 55 years and older to have kept their employer health coverage under COBRA indefinitely. Currently the coverage can only be obtained for 18 months.
Also cut from the stimulus bill was a provision that would have allowed low-income workers to apply for Medicaid if their jobs don't provide insurance.
Unemployment benefits have been extended by the stimulus bill for up to 33 weeks with increased payments of $25 a week through 2009.