Among the provisions of the new stimulus package signed by President Obama are subsides for unemployed workers continuing their health care benefits through the Consolidated Omnibus Budget Reconciliation Act (COBRA). The key points of the package are:
- Who is eligible? Employees who have been involuntarily terminated between September 1, 2008 and December 31, 2009 with annual incomes less than $125,000 (single) or $250,000 (couples) are eligible for the COBRA premium assistance. Qualified individuals, who initially decline COBRA coverage, would be given an additional 60 days after they receive notice of the special election period to elect to take advantage of the subsidy.
- How much is the subsidy? Eligible employees may receive a 65 percent subsidy toward their health care premium for up to nine (9) months. The Treasury Department will provide employers (or health plans, if they administer COBRA benefits) a credit against payroll taxes to cover the cost of the subsidy. The subsidy terminates upon any offer of new health care coverage through an employer or with Medicare eligibility.
- Are there new notice requirements? Of course! COBRA notices must include information on the availability of the premium assistance. Model notices from the Department of Labor are due 30 days after enactment (so by March 18, 2009). The Act requires employers to notify all plan participants of the new subsidies within 60 days of enactment (or by April 17, 2009). We'll post the model notice as soon as it is available.
- When does the subsidy take effect? March, 2009.
For more information on COBRA, check out this page from the Department of Labor.