New COBRA Provisions Could Cushion Job Loss


As the United States continues to deal with the eliminations in jobs and reductions in work force across the country, changes in the ARRA (American Recovery and Reinvestment Act) have afforded the unemployed a bit of a cushion. Many unemployed workers find themselves in financial trouble when they are forced to cover the health premiums previously paid by their employer. Those that were involuntarily terminated from their jobs between the dates of September 1, 2008 and December 31, 2009 could find some relief.

The new COBRA provision allows an employer to receive a subsidy from their previous employer of 65% of the COBRA costs. The employer is then reimbursed by the government through the crediting of impending payroll tax. The remaining 35% is the responsibility of the employee. For example, if a terminated employee finds that family benefits for his family of five would cost $1000, the new payment under the COBRA subsidy would be $350.00.

If you or a family member has recently lost their job, consider whether you meet the following requirements:

* You were involuntarily terminated between the September 1, 2008 and December 31, 2009
* You elected continuation of coverage when it was first offered or during the additional period allowed to elect.
* You are eligible for COBRA benefits through your prior employer

There are certain restrictions to the COBRA subsidy that can be found at the Department of Labor website.