Frequently Asked Questions
A short-term extension of COBRA health insurance premium subsidies for involuntarily terminated employees has been approved.
Now, employees terminated from April 1 through May 31, 2010, will receive the 15-month, 65% federal premium subsidy. Prior to this extension, March 31, 2010 was the cut-off date.
President Obama is urging lawmakers to extend the COBRA premium subsidy through the end of the year. The Senate is currently working on this new extension.
The Focus Group will keep you posted of any upcoming changes to the COBRA subsidy as they become present.
UPDATE:
The latest extension applies to anyone who involuntarily lost a job between April 1 and May 31 of this year. The subsidy lasts for 15 months from when coverage begins. (COBRA coverage typically lasts 18 months; in some cases it can be extended to 36 months.) To qualify for the subsidy, you must apply for coverage within 60 days of losing benefits, not be eligible for Medicare and not be eligible for any other group health plan, such as one offered by a new job or by a spouse’s employer.
You can get additional information at http://www.dol.gov/COBRA or by calling a Department of Labor benefits advisor toll-free at (866) 444-3272.
NOTE: There is a possibility that the COBRA extension could be opened up to those who lose their jobs after June. We’ll keep you posted.
UPDATE 5/27/2010
It looks as if House Democrat leaders have released a scaled-down version of the H.R. 4213 bill. Under the revised bill health benefits and COBRA subsidies will now be extended through November 30, 2010 instead of December 31, 2010.
The reasons for the scale down is an effort by Democratic leaders to get the measure approved before Congress breaks for the Memorial Day weekend.
The estimates from the Congressional Budget Office puts the price tag at around $144 billion. This includes cuts on unemployment benefits and COBRA subsidies. It was nearly $200 billion.
So, with opposition coming from fiscal conservatives, both Democrat and Republican, the measure will be difficult to pass by Memorial Day.
If you may lose your COBRA benefits on May 31, remember, in certain states insurance companies can impose a waiting period for pre-existing conditions if there is a lapse in coverage greater than one day. Be sure to check with your local broker to confirm.
UPDATE 6/2/2010
It seems that the Dems were concerned about getting enough votes to get the Jobs bill passed. In order to garner the votes, they had to drop the COBRA Subsidy or 65% discount over concerns about short term deficits and political considerations.
The same Democrats who claimed to take the moral high ground when it came to Health Care Reform are the same ones now leaving thousands of Americans without health insurance. Was it not these Democrats who claimed the reason for reform was to insure all Americans had affordable Health Care Insurance?
What does this mean for me?
It means that if you lose your job starting now, you will no longer qualify for the 65% discount COBRA subsidy. You would be required to pay the full price of your COBRA Health Insurance.
Is there a chance that the 65% discount will go longer than 15 months?
No. That is a common misunderstanding. The extension was only for those who recently lost their jobs. Not those who were coming to the end of their 15 months.
What Next?
The most prudent thing to do is to find a new family health insurance plan immediately. Depending on your state, you do not want a lapse in coverage. Especially if you have pre-exisiting conditions. Insurance carriers can exclude pre-exisiting conditions if there is a lapse in coverage.
If you have questions about your options, please don’t hesitate to comment below or contact The Focus Group at 888.320.5388.
RELATED INFO
- FAQs On The COBRA Premium Reduction Extension Provisions
- COBRA Fact Sheet
- COBRA Subsidy Extension Beyond 15 months
- Alternative to COBRA Insurance
- When should I take COBRA
Tags: COBRA Subsidy, Michigan
Has anyone heard if there’s any talk of extending the subsidy from 15 months to the full 18 months of COBRA?
Hi Don, Great question. From what I understand they are discussing extending the subsidy through the end of this year (2010). Nothing as yet regarding the full 18 months. – B
Thanks. For those of us who jumped onto the subsidy when it was first introduced, the 15 months are up at the end of May. I have made other arrangements for June 1, but would take another 3 months of subsidized COBRA in a heartbeat if it’s offered!
May 21, 2010
Any news regarding the CobrA Subsidy through Dec 2010?
My employment is being terminated June 30 2010 so I am really hoping they extend it?
Hi Ellis. Your hopes may come true. As of now, legislation is currently pending, which, if passed, could extend the COBRA subsidy through December 31, 2010. Thanks for the comment.
My fifteen months ends the end of June. If there is an extension until December 2010, would I be included in that?
Hi Kathy. If you COBRA discount ends in June after 15 months, you do not qualify for the extension. You would be required to pay the full price of your COBRA coverage. The discount is good for 15 months. If the full price is too high for COBRA, the alternative would be a short term medical plan or individual health insurance plan.
Any news on the COBRA subsidy extension?
I was recently laid off. I am 53 years old and my compony’s HR dept has told me that I do not qualify for the Cobra reduction benefit because I qualify for the retire’s group health plan as I had 28 years with the company yet official retirement is not until 55 years old. My monthly premiun would be $1200. If I went with Cobra without the reduction, my monthly premiun would be $1050. Can i still qualify for the Cobra reduction benefit even though I qualify for a retire group plan which would cost more even without the government reduction? Thanks.
Hi Ed, It looks as if they will vote on the American Jobs and Closing Tax Loopholes Act of 2010 before the Memorial Day weekend. If that happens it should extend COBRA subsidies through the end of 2010. The extension would be those workers terminated on or before December 31, 2010. You can view the bill HERE.
Hi Ed O. This is directly from the government FAQ website regarding COBRA.
The way we read it is that if you are eligible for another group program (ie group retiree program). You would not be eligible for COBRA. I would contact the Employee Benefits Security Administration Benefits Advisor at 1.866.444.3272 to verify.
I am now reading they did not extend the cobra subsidy after May 31st. Is this true? Is there still a chance they will extend it? I understand there is a lot of political infighting. I am going to be laid off on June 30-so it is really critical because my health coverage is $1900 a month-to get that 65% off is vital.
Hi Ellis, It does indeed look as if they will not be extending the COBRA subsidy to those terminated from their jobs after May 31st. The chance of them extending it looks pretty slim at this point. You are right about the political infighting. It looks like the Dems who were so anxious to have health care for all, left you hanging. Let me know if I can answer any questions for you regarding alternatives to $1900 a month. You can also research more about COBRA health insurance alternatives at mycobrahealthinsurance.com Good luck!
My 15month 65%discount for cobra will be ending in August. Has that been extended to 18 months? If not, is there still a change it could?
Thanks
My husband was terminated on May 19, 2010. I know we are eliglble for this cobra subsidy, however, the employer did not take him off the books and payed health insurance up to june 30. We have a letter of termination, Who is responsibile for this if they made the mistake. can you direct me. We told HR to send necessary paper work for cobra. Also how many months will we receive
Roseann
Hi Roseann, If he was terminated in May and you have the letter of termination, you should qualify for COBRA. You can call 1.866.444.3272 to speak to a Benefits Advisor from the government. Even if the employer paid for your coverage through the end of June I would recommend calling to get everything in place now. Thanks!
My husband got layed off June 4th. Any chance the COBRA subsidy will be extended? We will need the 65% savings.
Bev
Hi Bev, Right now it looks as if they are in the process of reopening the discussion. If they do pass something, it most likely would be retroactive to June. How long is your plan paid through? If you can start reviewing other options now, it will save you heartache in the long run. Even if you do end up getting the subsidy. Try mycobrahealthinsurance.com you can get quotes on alternatives to COBRA health insurance. Best regards.
Our reduced COBRA rate also ran out as of May 31, 2010. The new premium for COBRA is now a huge payment. We have had to pay June at the regular rate, but do not know if we can make July’s payment. Should we stick it out and hope they overturn the ruling and go back to the reduced rate? Or, search for other insurance…
Hi Mary, Sorry to hear your predicament. It is a tough situation. One that we hear all to often. We’re unsure when or if an extension would be passed. If paying the regular rate is a burden, my recommendation would be to research other options, just in case. I’m sure the money saved could be put to use elsewhere. Regards, Billy
Hi Katie, we replied to your comment via email. Thanks for stopping by!
I was laid off June 2nd. Cobra premiums for me are going to be 39% of my GROSS monthly unemployment income. Under the subsidy I would have paid only 13% of my monthly gross.
Thank you Jim Bunning, R-Kentucky, and your conservative cronies for pushing to cut this benefit that would have helped me and the many Americans in my situation. And shame on you, Dems, for not having the balls to stand up to them.
http://abcnews.go.com/Politics/senator-jim-bunning-unemployment-benefit-extension-cobra-subsides/story?id=9954891&page=1
I am a teacher that was given my termination letter in April, my last day of work was 5/26 but I was given the option to continue my health insurance through August 31st. My HR representative said that I am not eligible for the cobra subsidy because they go by the last date of health coverage. I asked when my termination date was and she said June 30 (last day of contract). She said she would send in my paperwork to Ceridian with an August 31st date. My situation seems like no other and I’m not sure what to do next. I just don’t feel like the date she is submitting is correct.
are they still working on extending coverage for those who lost their jobs in june 2010? I mean the 65% copay?
Hi Dawn, As of right now it seems dead in the water. However Sen. Robert Casey (D-Pennsylvania) has submitted a proposal that would make laid-off employees eligible for the federal COBRA subsidy. The amendment proposed would give the 65% discount to employees laid off from June 1 through November 30. The discount would be for six months. If you are without coverage, it is important not to go more than 62 days before taking COBRA or finding a COBRA insurance alternative.
Hi Nicole, if you were terminated in May, then you should be eligible for the COBRA discount. I would contact a government benefit advisor at 866.444.3272 to make sure that your HR representative is correct. My understanding is that your termination date determines the discount. Not the last date of coverage.
Hi there. I can understand your frustration. At nearly 40% of your gross monthly, that is quite a chunk. The downside to not getting the discount is that you are paying the full amount your employer was paying for your coverage. If you are willing to look at COBRA insurance alternatives you can still have affordable coverage. It just won’t be as comprehensive as your group plan. If you are healthy, rarely use your insurance, you may want to consider either short term health insurance or a high deductible HSA plan. Both of these will make sure that you will limit your overall exposure during your employment. Which isn’t that exactly what insurance is supposed to do.
I have been trying to see on a daily basis if there is any movement in Congress on extend the COBRA subsidy past May 31st. I know Senator Casey from PA has really been fighting to get it extended. I just think it is a no brainer to extend it since unemployment rates have not gotten better at all. Is there anything I can do as a citizen to push this along. I did write to Casey to tell him to keep pushing hard.
Also, has anyone heard of any movement at all to get this thing back on the table?