Here’s some good news for those who thought their Cobra health coverage subsidies expired or would expire soon: Your subsidy will now last another six months.
President Obama recently signed legislation that extended the length of the federal Cobra subsidy to up to 15 months, from 9, and expanded who qualifies for the subsidy. Now, workers laid off between Sept. 1, 2008, and Feb. 28, 2010, qualify for the subsidy. Under the act originally passed in February, only workers laid off between Sept. 1, 2008, and Dec. 31, 2009, qualified for the then nine-month subsidy.
With the subsidy, eligible workers need to pay only 35 percent of their total Cobra premiums to continue receiving health insurance through their former employers (the federal government reimburses employers for the difference).
Still, the subsidy doesn’t cover the full 18 months that qualifying laid-off workers can stay on their employer’s group health plans through Cobra, the Consolidated Omnibus Budget Reconciliation Act, passed in 1986. Congress may, after the New Year, consider a bill extending the subsidy to people laid off through June 30, according to Cheryl Fish-Parcham, deputy director of health policy at Families USA, a nonprofit health care advocacy organization that provides details about the extension here.
According to Ms. Fish-Parcham, those who were part of the subsidy program as of Oct. 31 and work at employers with 20 or more workers should get a notice from their health plans about getting reinstated within 60 days of Dec. 19th, when the extension was enacted. In the meantime, if they already dropped the coverage, they should call their plan and say they want to be reinstated and start paying the subsidized amount again.
If they have stayed with the coverage at a higher rate, she recommended asking that the difference be considered advance payment for future months. Those laid off from smaller employers are also eligible for the extended subsidy as long as their state laws give them the right to continue their coverage for the full period, according to Families USA. Such workers should consult their state Department of Insurance for more details as well as read the information posted here.
There also are other restrictions, including income requirements, limiting who qualifies. Those restrictions include annual income during the tax year that does not exceed $145,000 for individuals and $290,000 for families and no eligibility for coverage under another group plan (for instance, through a spouse’s employer) or under Medicare.
In addition, people with incomes of $125,000 to $145,000 (or $250,000 to $290,000 for joint filers) will need to repay a portion of the assistance that they receive, according to Families USA.
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