The stimulus package signed by President Barack Obama on Tuesday carries good news for those laid off workers who were finding it difficult to continue with their group health plan or COBRA. Hopefully some of your concerns would be taken care off in the new stimulus bill has special provision for COBRA or Consolidated Omnibus Budget Reconciliation Act.
A Brief Overview of COBRA
It is a decades old federal law, which refers to an extension of health insurance plan for workers. It allows the employees who lose their jobs the right to choose to continue with the group health insurance benefits provided by their group health plan for a certain period of time under certain circumstances. COBRA is included in the group insurance category and can be availed in a company with twenty or more workers. However, there is a great problem associated with it in terms of premiums.
Earlier the employee had to bear only 20 to 30 percent of the entire premium for the insurance and the rest was paid by their companies. But after being laid-off if the employees are desirous of continuing with the unemployment subsidy benefits of this medical insurance for the next eighteen months, they will have to pay the entire premium amount themselves. And trust me, if you are still unemployed, this could be quite hefty and eat into your already shaky budget.
The premium amount is quite big and can be termed as very expensive. Often over $1,000 a month because they will have to pay the share of premiums which was once covered by their employer, as well as their own share from the old group plan. All in all it makes it very difficult and unfeasible for majority of Americans to continue with the plan. According to some of the statistics, only less than 10% of all the laid off workers actually applied for COBRA.
But tough times like these not only demand some tough decisions and measures but also some sort of bail out by the government. If the big companies and chief execs can get their bail outs and fat corporate bonuses, it would be morally wrong to not lend a helping hand to the average Joe.
2009 COBRA Stimulus Bill
Under the new stimulus package the government will pay 65% of the total premium for the first nine months and as such the employees, who are already under strain from job loss, will find the medical cover more affordable for at least some time while they look for new jobs.
However there are certain conditions also which must be fulfilled in order to be eligible for COBRA benefits under the new stimulus package.
Firstly, only those workers who lost their jobs between September1 to December 1 will be provided with the 65% of the premium for COBRA as mentioned in the new stimulus bill announced by the government. Under the new bill those who lost their jobs after September 1 but choose not to go with COBRA will also have 60 days time to sign up for the proposed benefits .In this period they may decide whether to avail the offer or not.
There is another provision according to which those individuals who earn more than $125,000 and those couples who earn more than $250,000 will not be eligible for the proposed benefits.
But there is also a bad news along with this good news which is that the stimulus bill does not offer medical insurance cover for those employees who do not come under the COBRA as they work in small organizations with fewer than twenty employees.
At least something is better than nothing.
I lost my job in June of 2008 and started paying COBRA on my own since January 2009 which is almost $400 a month which is very difficult as I only live on Social Security. When the COBRA stimulus was first mentioned, they did not give dates as to when your employment ended. Am I now to understand that I will not get help as my employment did not end after September. If this is true this is surely a crime as we all need help. I have two years to go until Medicare so this makes this payment extremely difficult.
Please comment on my e-mail.
Thanks, Sandy
My brother-in-law just passed away suddenly and my sister is disabled. Is she eligible for the medical Cobra stimulus?
This is crazy…my husband was laid off on Dec.4 to which he had all three of our children on his insurance…Now because he got laid off three days too late I will have to decide if I need to pay the mortgage or COBRA!
Ashley,
I saw on CNN that the date was thru Dec 1, 2009 not 2008. If thats the case your husband would qualify.
Thanks for the info…I had been looking for this information but couldnt find it. Thanks so much!
my husband had to undergo an operation and will be on disability. Doeshe qualify for the cobra stimulus package?
My husband works for the Bricklayers union and has been laid off for 6 months. His insurance is based on how many hours he works in a quarter. We will have to start paying for his insurance next month. Does this qualify for the Cobra stimulus?
this do not seem right. i got laid off in june of 08, so you are
telling me because it was before september, i can not apply for corba. This is not right since i could not afford to take corba at
the time of my lay off. please apply.
I have a question if someone can answer it, and it is, the package states that if you are laid off and quailfy for cobra it will pay 65%, o.k. what I want to know is. What if you quit your job before they laid you off and found another job but it did not offer insurance but you quilfy for cobra from you previce employer would the 65% still apply to us even thou I quit and found another job before I got laid off when I knew my company was going to be laiding off at least 1000 emplyees? CAN ANYONE ANWER THAT QUESTION THAT KNOWS THE CORRECT ANSWER! My benfits department tells me no, because we voluntary quit but if I would have waited and let them lay me off then I would have no money, no house, no car, so why doesn’t it apply to me as well?
I was laid off in June 2008, my former employer paid my medical insurance in July and August, I started to pay my COBRA in Sept 2008. Am I qualified for COBRA Stimulus?
COBRA is too much for our family, it costs us $1,200.00/month. We can not shop for another insurance due to the existing illness that my husband has. Can someone help to find the solution?
Vimean, I wouldn’t think so but I may be wrong. Please get expert financial help from a licenses adviser to have your questions answered.
In order for me to take advantage of COBRA, the fee was $1990.52 per month. How this is supposed to provide assistance or help to an unemployed person with a family to take care of? It is very scary to me knowing that my family is without health insurance with the cost of basic health care cost as unaffordable as they are.
Is there an extension of the Cobra Stimulus Package past December. I am loosing my job in January, 2010? I have a pre-existing condition.
Lily, cobra is extended.Read COBRA: Subsidy Eligibility Period Extended