Booster Shots

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Unemployed? Stimulus plan has you (partly) covered**

February 17, 2009 |  4:23 pm

As the days wound down to final passage of the national stimulus bill, Booster Shots reported the tentative provisions that the package was expected to include on subsidies to those paying for COBRA, the health-insurance extension that many employers are required to offer to workers they have laid off for up to 18 months after their departure.

Now, the massive stimulus bill is making its way to President Obama's desk for his signature, which is expected Tuesday. And attorneys, human resources professionals and even a few out-of-work journalists are scouring the fine print for the details as they finally emerged.

Here are a few of the highlights, with thanks to Sibson Consulting, a New York-based HR consulting firm with an L.A. office on Wilshire Boulevard:

— You're eligible if you were laid off after Sept. 1, 2008 (an earlier version of this article reported that lay-offs following Sept. 30th would be eligible), or are laid off any time between Tuesday (when the bill is expected to become law) and Dec. 31, and if you worked for an employer required to offer you the option of extending your group healthcare coverage for 18 months (and under California law for 36 months), at 102% of the cost to the company.

You are not eligible if you made or will make more than $150,000 (individual) or $250,000 (joint return) in the year in which you would receive the subsidy. There's no proof of income required at the time you sign up. But if, once you have filed your taxes, you discover you earned too much to qualify, you will be required to repay the subsidy you've received.

— Starting with March 2009, the subsidy will pay 65% of your monthly COBRA bill directly to the employer (in the form of a payroll tax credit), once you have paid 35% of the bill. If you did not elect to continue your insurance coverage under COBRA — say, because the bill was too steep — your former employer is now required to give you another chance to sign up. If you did elect to buy the COBRA insurance and have been paying the full cost of the insurance, the subsidy is not retroactive (an earlier version of this article reported that it was). But if you have make your full COBRA payment for March (say, because of uncertainty about the COBRA subsidy program), your former employer must give you that subsidy either as a credit toward future COBRA payments, or as an outright refund if you are no longer enrolled (an earlier version of this posting indicated that the subsidy was retroactive to September; that is not the case).

— The subsidy ends after nine months — shorter than the 12 months that had been written into an earlier version of the bill.

— The stimulus bill also extended a COBRA subsidy program that had been part of the Trade Act of 2002 but had expired. This would give a 65% COBRA subsidy to any worker whose job was lost due to foreign trade competition and whose employer has applied for and been granted entry to the program.

All of these details (and doubtless many, many more) are to be posted and disseminated by the Internal Revenue Service and the U.S. Department of Labor in the next 30 days. To get them, you'll want to check here over the next several weeks. Follow the link to Cobra Continuation Health Coverage FAQs, and all the answers to the questions the IRS and Department of Labor thought to ask should be there.

— Melissa Healy