Congress Extends Health Premium Subsidies

By Staff Report

Oct. 1, 2008

Congress has given a five-month extension to a federal trade law that provides health insurance premium subsidies to workers who lose their jobs due to foreign competition and older pension-plan participants whose plans fail.

Legislators voted over the weekend of September 27—as part of a broader bill—to continue a program created by a 2002 law in which eligible beneficiaries receive a 65 percent tax credit to partially offset the cost of health insurance coverage they purchase, such as COBRA continuation coverage. The 2002 law creating the health coverage tax credit expired at the end of last year.

Last year, the House passed legislation that would significantly expand  the health coverage tax credit by increasing the amount of the credit to 85 percent and in certain circumstances allowing beneficiaries to retain COBRA coverage until they were eligible for Medicare at 65 or became eligible or enrolled in another health care plan. While the federal premium subsidies for COBRA coverage would have run out after 30 months, a young employee potentially would have had a right to purchase COBRA coverage for decades.

The Senate, though, did not act on that measure.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail Management’s online news feed is now available via Twitter.


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