Senator Scales Back COBRA Subsidy Extension Plan

Laid-off employees would again be eligible for federal COBRA premium subsidies under a proposal by Sen. Robert Casey, D-Pennsylvania.

Under the amendment that Casey proposed last week to tax extension legislation, employees laid off from June 1 through November 30 would be eligible for the 65 percent federal premium subsidy for six months.

That is a reduction from the 15-month subsidy extension he proposed earlier.
Senate Democratic leaders have been unable to muster sufficient support to bring the broader bill, H.R. 4213, to a vote by the full Senate. Republicans and some fiscally conservative Democrats oppose the broader bill because it would add to the federal deficit.

However, Senate Finance Committee Chairman Max Baucus, D-Montana, pledged last week to refine the measure to reduce its overall cost and get the 60 votes needed to stop debate and win passage.

It isn’t known how much the latest extension proposal would cost. An earlier proposal to extend the 15-month COBRA subsidy to those laid off through year-end was projected to cost nearly $8 billion, according to congressional budget analysts.

On the Senate floor, Casey said the six-month COBRA subsidy would be fully paid for by a change in the federal earned income tax credit.

While the economy is improving, layoffs are continuing and the extension of the subsidy is needed to ensure that laid-off workers have access to quality health care, Casey said.

The latest COBRA subsidy expired May 31, which means employees involuntarily terminated since June 1 have been ineligible for the subsidy.  

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

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