Another COBRA Extension Eases Health Insurance Burden

Posted by marykeating on April 24, 2010 under Economic situation, Employment benefit issues | Be the First to Comment

Last week, Congress again extended the reach of the COBRA subsidy.  As reported here before, the subsidy was part of the legislation designed to jump start the economy and ease the pain of the unemployed.  Instead of paying the full freight of health insurance (plus a two percent administrative fee), the newly unemployed person could pay only 35% of the health insurance premium. The employer paid the rest, and could take an offset from the withholding tax owed to the federal government.  In other words, the government pays for the majority of the premium.

This program has been extended not only to last for fifteen months, from the earlier nine, but also applies to those laid off in April or May of 2010.  The subsidy is available for people who lose their jobs, not those who quit.

COBRA Subsidies Live On

Posted by marykeating on March 24, 2010 under Employment benefit issues, Pending legislation | Be the First to Comment

Congress keeps tweaking COBRA subsidies to deal with the sustained unemployment rate.  In December the COBRA subsidy was extended until the end of February.  People eligible for the subsidy will have to pay only 35% of the monthly premium, while the employer pays the rest, and takes the cost of the 65% premium as a credit against withholding taxes.   Congress added a month, and has not been trying to extend it further.  Last week the House of Representatives passed a bill to extend COBRA subsidies until the end of April.  Meanwhile the Senate passed a bill to extend the subsidy period through to the end of 2010.  Both bills must be passed by the other house, though it looks as though there will be no problem making the April extension into law in time.  American Workers, State and Business Relief Act of 2010.