COBRA Subsidies to Lapse at End of the Month

COBRA Subsidies to Lapse at End of the Month

Program unlikely to be extended.

COBRA subsidies to assist unemployed workers pay the premiums on their employer-provided health insurance are scheduled to expire, yet again, on Aug. 31, 2011. The program provides subsidies to pay 65% of premiums for up to 15 months following involuntary unemployment.

The subsidy program was originally passed as part of President Barack Obama’s stimulus package in February 2009 as a way to assist the unemployed during the height of the recession. The program was later extended several times, the most recent of which applied to workers who became unemployed on or before May 31, 2010. That extension means workers who lost their jobs in May 2010 will see their 15 months of COBRA eligibility expire at the end of this month. Once the COBRA subsidies expire, the unemployed must pay 102% of the full cost of employer-sponsored coverage in order to continue benefits.

Congress is currently out of session until after Labor Day. Regardless, due to the current focus in Washington on reducing the budget deficit, it is unlikely that the COBRA subsidy program will be extended.

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