Booster Shots

Oddities, musings and news from the health world

« Previous Post | Booster Shots Home | Next Post »

Job loss: Stimulus package includes health insurance subsidy

February 10, 2009 | 11:26 am

If you are among the 1.5 million Americans who have lost their job since September 2008 and are paying to extend your company-sponsored health insurance under a law called COBRA, studies confirm what you already know: The payments are killing you. In 41 states, according to a recent survey by Families USA, average COBRA payments amounted to more than three-quarters of those states' average unemployment benefits.

But according to the fine print of the stimulus bill being hammered out between the U.S. Senate and House of Representatives, help is on the way -- for those who elected and are paying for health insurance under COBRA, and for many of those who took a look at the prospective price tag and said "no thanks."

The two bills differ in how generously they will help the unemployed with their COBRA insurance payments. But the House and Senate bills contain COBRA subsidy packages, and the provision hasn't been controversial. So it's considered a good bet to be part of the final package adopted by Congress this week.

Here are the details, provided by human resources consultants of the New York-based Sibson Consultants:

-- If you were or are laid off between September 2008 and December 31, 2009, the stimulus bill provisions on COBRA subsidies would apply to you.

-- The stimulus program would subsidize your COBRA payment (the House version would pay 65% of it, the Senate version would pay 50%) by giving the organization to which you pay your COBRA bill (typically your former employer) a tax credit. You would first have to pay your share of the monthly payment, then the stimulus package would kick in its subsidy payment (which is really a credit).

-- If you lost your job within the designated period and did NOT elect to continue your health insurance under COBRA, your employer must offer you the opportunity to sign up for extension of COBRA coverage as soon as the bill becomes law. For those who maintained their insurance under COBRA, the federal subsidies are not retroactive -- meaning, you won't get any reimbursements for the cost of COBRA payments you've already made. Whether you sign on once the bill becomes law, or have stayed insured under COBRA continuously since you lost your job, the subsidy begins when the bill becomes law.

-- Eligibility for the subsidy is a maximum of 12 months, and you lose eligibility for it once you become eligible for coverage under another group health plan -- other than health flexible spending accounts. (COBRA benefits must be provided for 18 months by companies who lay off workers, and the bill paid by the laid-off worker -- pre-subsidy -- is the equivalent of 100% of the cost of coverage, plus 2%.)

-- If you lose your job between the time the bill becomes law and 2010, and you haven't exhausted your 12-months of subsidy coverage yet, you'll be eligible for the subsidy.

Want to check the fine print? See the Library of Congress' posting of the House bill known as HR 1, including congressional actions -- the Senate's passage today among them --that have amended it. Care to weigh in with your representative or senator on the matter? Try here and here, respectively.

-- Melissa Healy

Post a comment
If you are under 13 years of age you may read this message board, but you may not participate.
Here are the full legal terms you agree to by using this comment form.

Comments are moderated, and will not appear until they've been approved.

If you have a TypeKey or TypePad account, please Sign In

Comments (38)

Won't help me: laid off 8/29/08. Can't find work...NOTHING.

Where do they come up with such arbitrary cut off dates? The economy has been in recession since late 2007. It is nice for those just getting laid off but this bill does nothing to help those suffering the longest and who have drained their finances to the max paying thousands for COBRA month after month after month.

Well chin up folks , look at it this designated by the hidden stimulus health provisions, if you make to "senior citizen" status(as designated by the feds), you probably won't get the meds, procedures etc. you need, you'll die and all your worries will be over. Just google "stimulus soylent green" and you can learn all about it.

The Senate has not helped those who are having difficulty obtaining insurance especially retirees not yet age 65. Need to provide Cobra extension for retirees to medicare age (65).

What about for someone like me, who has had my hours reduced to part-time so that I no longer qualify for health insurance at my job? I'm making half the money than I did and now have to pay more than double for my health insurance under COBRA.

What about an honest independent small business working guy who has to pay full price for his healthcare, and 15.3% of his income off the top to cover SS and Medicare payments. A typical family of 4 pays $1500 for healthcare (which is $18,000 annually) and then add in the 15.3% that's more than 30% of you're lucky enough to gross $100k!.
A guy get's laid off, he gets unemployment for 59 weeks and now we're gonna pay for his healthcare too - WHY LOOK FOR WORK????
Why not just put these guys to work with the unemployment and health insurance subsidies?? If you gave a company a credit for hiring someone in the amount of the unemployment and the health insurance credits, you'd make more of an impact on the economy.
Talk about a welfare state!

Hey, Bob,

I don't know how much you think unemployment pays but it's a far cry from a replacement for your lost income. COBRA is expensive but necessary especially if you have a family. I have two special needs kids and a third "garden variety" child. My COBRA is about $1400 a month. Without COBRA, no physical therapy for my son with cerebral palsy. COBRA currently eats up more than 75% of my unemployment. Sorry you think this is welfare. I'd love to get a job. I've been calling everyone I know, sending resumes, making a nuisance of myself. And nothing. Just nothing. Because our kids need so much care, my wife hasn't worked outside the home in years. She spends a lot of time doing the kind of maintenance for our kids that most kids grow out of by the time they're 3. For all that, we're lucky. We were able to save a little bit while I was working and our savings have helped supplement the unemployment. We were also fortunate not to have any debt (other than our mortgage). What about all the other people who have been blindsided by the economy? The country needs entrepreneurs like yourself but please don't think that those of us who are out of work are having some kind of vacation.

Try loosing a job at 60 years of age. You are not going to get hired and if you are paying $350.00 a month for Cobra consider yourself lucky. I will not qualify for the 50% the government is going to pay for those laid off after September 8th. My Cobra will run out in May and if I don't find a job with benefits, private insurance will cost me $700.00 per month, which I cannot afford to pay. I will become one of the millions without insurance, a burden to the tax payers. Why not just extend the Cobra time line. This would not cost the taxpayer and makes perfect sense.

I was laid off in Dec. 2008 after being with a company for 30 years. As a part of my severance package, if I elected COBRA (which I did) my company agreed to pay 80% of my COBRA premium for 6 months...then I will have to take over and pay 100% for the remaining 12 months.

My question is: Will I be able to take advantage of the one year subsidy from the stimulus package and can I wait to start this one-year subsidy period once the 6 months is up (the time period that the company is subsidizing 80%)?

Or must I start immediately (as soon as the package becomes law)? If I don't start immediately, then will I lose out completely???

Piggybacking on Bob and Jerry's statements - this subsidy is also not going to be a complete replacement of health insurance premiums. I am single - no kids, not a lot of health care costs - but I will still be paying at least $100 more per month to keep my health insurance. Combined with unemployment benefits that are a fraction of my old take-home pay, this will provide some needed relief - but it will still be difficult to keep my head above water.

Believe me - those of us receiving unemployment benefits are experiencing no walk in the park.

If you are unemployed why no Cobra help if you lost your job prior to Sept 2008 ??

I am currently under COBRA and fall in the eligible period (Sep 1, 2008 to Dec 2009).
Question is if I already paid the full COBRA premium for the month of February, will 50% or 65% whatever is finally legalised, be paid to me or adjusted towards future payments??
Can anyone clarify, please.


THis bill on cobra is needed in the worst way for all americans. I had a liver transplant in 1999 I was very lucky. But my one perscription cost 1100.00 a month, plus other expenses. I can not afford 1000.00 a month for cobra,and if I do not take my medication I am a DEAD MAN!!!! So you people who think this is welfare you are soooo wrong. People in this country want to have a good job and work for what they receive, but the econemy at this point in time will not allow that to happen,we will fight through it, but all of us need help once in while.

I have been unemployeed since 2006 so then when i turn 62 i just went ahead retire at 62 and me and my wife are both recieving ssi and its not enough
i have been looking for part time atleast but no taker i had some few interview but no one or any employer have the time to call me if i am eligible or not but to be 64 now
no company will ever accept me for any part time.if i have no income will i be eligible on Obamas stimulus package?

Congress is notorious for wasting taxpayer money, long term, by their exclusions. They readily bail out the financial institutions without all of the exclusions that they impose on the people who are paying for it & who are in dire straits just trying to survive. Why is the Cobra help only for those who lost a job? I am 54, disabled and my Cobra ends in a few months. I have to live off of my investments of which 50% disappeared in the past few months. I paid for Social Security & the so-called disability "insurance" because of the exclusion of having to do it in the "correct" time period. It will not be long before I will cost the taxpayers much more than if I was able to continue my greater than $600/month Cobra until I am finally able to receive Medicare. Without insurance I may very well never see that day but then maybe that is what Congress is banking on.

Follow up to Charlie’s comment on February 10, 2009

I, along with my entire team was laid off July 2008 from a large corporation. I am 62 years old and worked all my life since I was 14 years old. I have never asked for any kind of handout or welfare and have always paid my bills by the scheduled due date. I have relentlessly looked for a job and no one wants to hire me at my age. I will need to cancel my COBRA insurance because it is depleting me of my remaining funds to pay my monthly bills. It is worrisome being without insurance at my age.

Why the COBRA cut off date of September 2008 for people who have been unemployed far before this September date?

Carol | February 16, 2009

Where did they pick September 1, 2008. What about all the folks who have been out of work prior to that date. They are SOL?????

If it applies to you, how do you get on the list for the stimulus assisted COBRA payments from the government? Send an e-mail to your congressman, the "so called" special website Obama said the government is setting up?

What most people don't realize is that those small business owners who have already had to lay off employees because of the current economic situation are now REQUIRED to pay 65% of the COBRA premiums for former this break being given to the former employee is now the burden of the employer. What's going to happen then? Well, the employer who could not afford to keep all their employees is now likely not going to be able to keep MORE of their employees because they're paying for COBRA! Before long, no one will have a job and the employers will have to close up shop completely....and there will be NO ONE to pay for anything for former employees!

In lay-off situations, I can understand some transfer of the financial responsibility of COBRA. However, my husband owns a small medical company, and has not had to lay anyone off...EVER. He has, however, had to FIRE employees for violating healthcare rules and/or giving sub-par care, which he will not tolerate, period. In that situation, I don't think it should be his responsiblity to provide them ANYTHING at all. If you get fired, you lose your benefits...period. Those of you who think Obama is the "Savior of our Economy"...think again.

Cobra indurance all well and good if you fall in between the dates set up. I lost my job becasue my company closed and we had no Cobra Option so it was do without insurance or purchase my own.I pay $333.00 per month, so basically only those on Cobra can catch a break what about the self employed or those folks like me I need help as well as anyone else, but we are SOL. This plan like all the others helps a selected few.It's unfair to all of us who are struggling.

I have been laid off for over 9 months, paying 1100.00 in Cobra since my husband has cancer. I have been looking and looking for a job with no luck.
Why in the world would they not include people that have been paying for COBRA for at least all of 2008 when companies really started laying off people!
How about just subsidizing COBRA for all of us until we can get out of this mess.
We really need help...all of our savings are going just for Health Insurance...we are in our 50's so forget about retirement in our future. Very sad times!

Do you have to be laid off to get the stimulus help with Cobra? My husband was fired.

Yes, I want to know about those of us who have been on Cobra before this set period, and who have spend most of their savings on Cobra. I was kinda excited and was cheering for Mr. President to sign the bill becoz of the Cobra option and now this exclusion. Yes, where did they came up with Sept 2008. And how come these banks including the car makers, got all those billions with little recourse if any. What about us?

I GOT layed off feb/12/09 ...more than a week ago... and i will get offered cobra in the mail. Will this qualify for my situation?I heard gorverment would have a 33% disc. i cant afford 300 for cobra on my own having just lost my job and having rent and car payments....?

Why was September 1, 2008 chosen as the qualifying date for Cobra subsidy?

My husband lost his job June 1, 2008 and is ineligible to receive any help.. It’s grossly unfair to a huge number of unemployed workers.

We need to raise our voices and be heard. Please tell everyone you know to get the word out. Write letters to your Congressman or Congresswoman, your senator, your local paper. This is unjust and the date must be changed!

NO COBRA for me since I was laid off before the September 1 cutoff.

What a farce? The LA Times and local news should run a story about all of the people supposedly helped by the COBRA subsidy but aren't going to get anything and are screwed. But the gov't always makes it sound that all COBRA people will get the subsidy, until you read the fineprint of the actually pass law...



The Latest | news as it happens

Recent Posts
test |  March 15, 2011, 4:00 pm »
Booster Shots has moved |  July 12, 2010, 6:02 pm »