House and Senate Conferees Agree on 65 Percent COBRA Premium Subsidy

By Staff Report

Feb. 12, 2009

House and Senate negotiators reached a final agreement Wednesday, February 11, on the massive stimulus bill, which is expected to receive final approval from the House and Senate by Friday.

The conferees’ agreement is similar to COBRA provisions approved by the Senate this week. Under that measure, the subsidy would have been 50 percent of the premium and it would have been available for up to 12 months.

The earlier House version called for a 65 percent premium subsidy up to 12 months. It also would have allowed employees with 10 years of service and those 55 and older to retain COBRA until eligible for Medicare, a potentially decades-long entitlement that business groups successfully fought to have removed.

According to a draft summary of the final compromise bill, the COBRA premium subsidy would not be available to individuals with an annual income exceeding $125,000 or to couples with annual incomes exceeding $250,000.

Like the earlier bills, the compromise measure would require employers to locate employees laid off since September 1, 2008, who declined COBRA to tell them they have a new right to opt for the coverage with the government picking up 65 percent of the premium.

Individuals would have 60 days after receiving the notification to sign up for the coverage. The subsidy would be prospective, applying to future premium payments.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail

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