Legislation introduced in the House of Representatives would extend and
expand an expiring provision in a 2009 economic stimulus law in which the
federal government pays 65 percent of COBRA health care premiums of employees
who are involuntarily terminated.
That subsidy is available for up to nine months for employees who have lost
their jobs since September 1, 2008. Unless the law is extended, the subsidy will
not be available to employees laid off after December 31.
Under
H.R. 3930, introduced this week by Rep. Joe Sestak, D-Pennsylvania, the subsidy
would be provided for up to 15 months. In addition, those laid off from January
1, 2010, through June 30, 2010, also would be eligible for the subsidy.
Without an extension of the current law, employees who began collecting the
subsidy on March 1—when it first generally became available—will lose it at the
end of November.
“Losing one’s job is difficult enough. But losing one’s health care along
with it—and worrying about being able to get treatment for oneself and one’s
family, or fearing bankruptcy in the event of injury or illness—is something
Americans should not have to cope with in this difficult time,” Sestak said in
statement.
The subsidy has had a dramatic effect on the percentage of eligible COBRA
beneficiaries opting for coverage. A Hewitt Associates Inc. study released in
August found that the percentage of laid-off employees opting for COBRA doubled
to 38 percent after the subsidy was enacted compared with the opt-in rate in the
several months prior to the subsidy.
The Obama administration has been looking into whether the subsidy should be
extended.
Filed by Jerry Geisel of
Business
Insurance, a sister publication of Workforce Management. To comment,
e-mail editors@workforce.com.
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