Senate Tax Bill Omits COBRA Subsidy Extension

By Staff Report

Jun. 9, 2010

Senate Democratic leaders unveiled a revamped tax bill Tuesday, June 8, that, like a House-passed measure, omits an extension of federal COBRA premium subsidies for laid-off employees.

That omission makes it even less likely that lawmakers will again extend the 15-month, 65 percent COBRA premium subsidy, which has expired and is not available to workers who are terminated involuntarily after May 31.

In March, the Senate approved a tax bill, H.R. 4213, extending the subsidy to employees laid off through year-end. But the House in May stripped the COBRA subsidy and its projected $8 billion cost from the measure before passing it and sending the bill back to the Senate.

While Senate Democratic leaders had discussed reducing the extension to November 30, the latest Senate version that Finance Committee Chairman Max Baucus, D-Montana, unveiled Tuesday did not mention the subsidy.

While the tax bill could be amended on the Senate floor to include a shorter extension, legislators have grown more leery of approving measures that would boost the federal deficit, and even a short extension would face an uphill battle, observers say.

The Senate measure also, like the House bill, would give employers more time to fund their pension plans. 

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


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