Update Dec. 21, 2009: President signs bill including COBRA subsidy extension
By Ashley Gillihan and Carolyn Smith
When Congress returned to session today, health care reform wasn’t the only piece of major legislation still left hanging as 2010 comes to a close. Also up in the air is whether the current COBRA health insurance subsidy will be extended.
The subsidy, which was part of the American Recovery and Reinvestment Act of 2009 that was passed in February 2009, has been a big help for thousands of unemployed workers who otherwise wouldn’t have been able to afford to pay for COBRA continuation coverage. For some, the subsidy is expring today, and many are scrambling to figure out how to keep their health coverage.
Employers and administrators are also trying to make a decision about how best to proceed with respect to those whose subsidy will end tomorrow — taking into consideration that an extension is likely but not guaranteed.
The subsidy extension may end up being part of a jobs bill, but there are no specifics yet on the precise terms, i.e., how the measure may differ from the bills that have been introduced so far. Rep. Frank Sestak (D-PA) and Rep. Andre Carson (D-In) each introduced a COBRA subsidy extension bill in the House in October. Also Senator Sherrod Brown (D-OH) introduced a similar Senate bill in November.
As we get closer to the end of the year, legislation is likely to move quickly. Congress could remain in session right up until Christmas, and coming back between Christmas and New Year’s hasn’t been entirely ruled out, though Congress doesn’t typically meet between Christmas and New Year.
Most likely the thing that would bring them back would be if Democrats believe it’s possible to pass health care reform or Congress comes up with an estate-tax fix. We’ll let you know when anything specific happens. In the meantime, “fluid” and “dynamic” are the words being used most often to describe the legislative process for the remainder of 2009.
Keep up with the latest legal changes affecting employer benefits and trends in employee benefits with the Benefits Complete Compliance
——————————————————————
Ashley Gillihan is counsel in the Atlanta office of the law firm Alston + Bird and is a member of the firm’s Employee Benefits & Executive Compensation and ERISA Litigation Groups. He focuses his practice exclusively on health and welfare employee benefit compliance and litigation issues for employers, health plan administrators, and other health and welfare benefit plan service providers. He also has extensive experience assisting financial institutions and insurance companies that serve as HSA trustees or custodians.
Carolyn Smith is counsel in the Washington, D.C. office of the law firm Alston + Bird. Her practice encompasses a full range of executive compensation and employee benefits issues as well as a variety of federal tax regulatory and legislative matters.
All I can say is PLEASE approve this extension ASAP for the sake of my 2 year old who needs tubes put in his ears ASAP to prevent hearing loss. I am begging you. PLEASE??
I am single, on unemployment, have pre-existing, and can afford the Cobra subsidy,the $156.00 a month…. but not $445.00. The 65% reduction helped me so much. So I will have to drop my Cobra, then I will probably become indigent,due top – can’t find a job, loose my condo, then the state will have to pay if something happens to me, taxes will go up. I am 56 , too young for medicare, and do have health issues, so to be able to go to another health insurance company is out of the question, please pass this extesnsion for the subsidy, and I am hoping the economy does turn around, and I get a job. I think this whole ordeal, well, let’s just say, this is one way of post-poning the baby boomer’s social security funds of ever becoming a higher amount, when you go to collect. If you don’t have work, then you cannot get 4 credits a year, well, so much for social security. I have worked hard all my life, but now, I am now sure where to go from here, just taking it one day at a time, and I am grateful for the subsidy, and am again, tying to remain positive, I will work again soon. Oh, and then after 15 years of being with my credit union, well they are going forma fixed rate to a variable, in January, right before the change takes effect in February with the credit card situation. Then if my FICO score drops, and it will because I am unemployed, they have the right to take everything left in my savings and checkingaat any time they think I may default. I make my payments on time, but to go from a fixed rate to a variable, Prime plus, etc. This is so messed up.
Yes, Please Please Please extend the subsidy. If the subsidy is allowed to run out my $397/mo payment will be $1200/mo. I am married and have three kids. Our savings is depleted, unemployment rate in my county is 11.6% and we have been looking for employment with no luck. We have been financially responsible and are just making it by on the buget we have in place now. The subsidy would more than put us over and beyond.
At 60, after 22 years with a small nonprofit I founded, with a current medical premium of almost $1,200 and several health issues requiring medications and monitoring, I’ve been laid off effective December 31. Although I have a broad set of skills and lots of education, there are no jobs out there, especially for someone my age. The COBRA sites make it look as though I’d be eligible for the subsidy, but there’s a Catch 22: both the qualifying event (layoff) and COBRA eligibility have to occur by December 31. But since medical premiums are paid monthly, I’m not eligible till January 1–as my daughter says, by one second. I will still have trouble paying more than $400 plus my full dental premium even with the subsidy. I urge Congress and the President to extend the COBRA subsidy as soon as possible. There are likely thousands of people besides me who will be laid off this month and don’t yet realize that they won’t be eligible for the subsidy.
if you want to see why this country is turning more towards a government run program,just look at the way the insurance industry has destroyed this nation.yes,we have the finest medical care in the world but no one can afford it.health of a nation should be paramount to the success and future for that nation to continue to prosper.i am all for the president’s plans to change the greed culture that prospers in this nation.i am beginning to believe that sen. bernie sanders of vermont has put forth the best plans of anyone.