Archive for Saturday, December 19, 2009

COBRA help for jobless may come by Christmas

December 19, 2009

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— Laid-off workers may soon get a reprieve from one of their worries: health insurance.

A proposal to extend the health insurance subsidies for Americans who have lost jobs in the recession is one step closer to gaining congressional approval. The proposal, which passed the House of Representatives Wednesday night, is tacked onto both the House defense appropriations and jobs-creation bills and would give some unemployed Americans an extra six months of help paying for their COBRA coverage.

Congress has been under increasing pressure to extend the subsidy, which was first created in last spring’s American Recovery and Reinvestment Act, and the Senate could act on the Defense bill as soon as today.

Federal law requires employers to offer continued health insurance to laid-off workers for as long as 18 months, though employees usually pay the full cost. The average monthly COBRA premium for a family costs $1,137, according to the Kaiser Family Foundation (KHN is a program of the foundation). That’s more than 83 percent of the average unemployment check, according to a study by Families USA, a consumer advocacy organization.

The federal government has been paying 65 percent of the costs of extended health insurance for Americans laid off after September 2008, bringing the average cost down to a more manageable $398 per month. Early on, the Joint Committee on Taxation estimated that about 7 million people could be covered at a cost of almost $25 billion, though it’s not clear how many people have gotten subsidies.

The subsidy was designed to last for nine months. As a result, the assistance began to expire for some workers on Nov. 30, leaving them to pay the full cost themselves. And the deadline for signing up, Dec. 31, is fast approaching.

The Defense appropriation bill, which has the best chance for speedy passage, would extend the sign-up deadline until the end of February.

The Jobs bill, which will likely work its way through Congress early next year, would extend it until the end of June 2010.

Both would lengthen the nine-month subsidy to 15 months and would be retroactive for those who already timed out.

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