Having to use the protections of COBRA when a person loses their health insurance with their job comes at a scary time for many people. More people have been joining that group with this years changes in the economy. Thankfully, this is one of the things that was addressed in the latest stimulus package.
COBRA is the protection that allows for a person to extend their health coverage by paying for it after they lose their job. The law required that it be offered for 18 months. The new change will double the prescribed time to 36 months.
The costs of maintaining the coverage was also addressed. Terminated employees can also get a subsidy set at 35 percent of your COBRA payment, for up to nine months. Employers will pay the remaining 65 percent and recoup that money by applying for a credit on their quarterly federal employment tax return. .
To qualify for the reduced COBRA payment, the termination had to have taken place between Sept. 1, 2008, and Dec. 31, 2009. Those who are eligible or become eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. There are income limits and beginning for payments is on or after Feb. 17, when the law was enacted. If your company closed or went bankrupt and there is no longer a group health plan, there is no COBRA subsidy available.
If you were involuntarily terminated between Sept. 1, 2008, and Feb. 16, 2009, but you didn’t sign up for COBRA , you may have another opportunity to elect COBRA coverage, as the plans are now required to notify you of a second election period.
For more details on the COBRA subsidy, go to the Department of Labor’s Web site at www.dol.gov/COBRA. You can also call the Employee Benefits Security Administration at 1-866-444-3272. There is also a helpful question-and-answer section on the COBRA provision for employers at IRS.gov.
A founding partner with Bradshaw & Bryant, Mike Bryant has always fought to find justice for his clients—knowing that legal troubles, both personal injury and criminal, can be devastating for a family. Voted a Top 40 Personal Injury "Super Lawyer" multiple years, Mr. Bryant has also been voted one of the Top 100 Minnesota "Super Lawyers" four times.