posted
The Stimulus Bill and COBRA Benefits How the COBRA Premium Subsidy will Help More Get COBRA Benefits
By Bobbie Sage, About.com Guide See More About:
* cobra health insurance * alternatives to cobra * affordable health insurance
Cobra Insurance
The American Recovery and Reinvestment Act, signed into law by President Obama on February 17, 2009, is a $787 billion stimulus bill. One of the many provisions of the bill is to directly provide relief to millions on the COBRA plan or ex-employees who need COBRA coverage. This "COBRA stimulus plan" will provide enrollees a COBRA premium subsidy along with providing COBRA benefits to ex-employees who denied coverage.
First, Let's Look at What COBRA Is
Before we learn more about the COBRA stimulus plan, let's start with explaining a bit about COBRA. The Consolidated Omnibus Budget Reconciliation Act, otherwise known as COBRA, was put into law in 1985 to help workers who lost their job continue their health insurance. Basically, it gave the ex-employee the ability to continue their employer sponsored health insurance plan. The insurance stayed the same but the entire premium was to be paid by the ex-employee.
The First Part of The COBRA Stimulus Plan: Reduced Premiums
The COBRA stimulus plan basically has two parts. In the first part, The COBRA stimulus plan will be able to step in and help struggling families trying to pay their COBRA benefits. People who are currently enrolled in the COBRA plan will get a 65% reduction in their premium costs. This will be a huge savings to many families struggling to keep their COBRA benefits.
Part 2: The Ability to Re-Enroll into COBRA
The second part of the COBRA stimulus plan will provide recently unemployed people the ability to re-enroll into the COBRA plan, even if they had denied coverage in the past. This will help a great amount of people who choose not to continue their health insurance through COBRA because they just could not afford it.
9 Key Details about the COBRA Stimulus Plan
1. Valid for people who were involuntarily terminated between September 1, 2008 and December 31, 2009
2. To be eligible annual income cannot exceed $125,000 for a single person and $250,000 for a couples
3. 65% of existing COBRA premiums will be subsidized by the U.S. Treasury Department
4. Subsidies will be available for up to 9 months
5. If you declined COBRA coverage after September 1, 2008 you will have the option to re-enroll into COBRA with the above subsides
6. Notices of the COBRA subsidies and re-enrollment information will be sent from the COBRA administrator (usually your previous employer)
7. Subsidies will be paid, via a refundable tax credit, directly to the COBRA administrators
8. Subsidies will terminate if the enrollee acquires a new health insurance plan through another employer or is eligible for Medicare
9. Subsidies will only apply to COBRA premiums paid after the effective date of February 17, 2009 and there will be no refund of premiums prior to this date Suggested Reading
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* The High Cost of COBRA - Why Am I Being Charged So Much For COBRA Coverage? * Health Insurance for the Self Employed * Cobra Benefits - What Are Cobra Benefits * COBRA Insurance and Choosing to Continue Coverage * COBRA Regulations - Consolidated Omnibus Budget Reconciliation Act (COBRA) ...
Posts: 8430 | From Not available | Registered: Oct 2000
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"Q8: How do I apply for the premium reduction? If you were covered by an employment-based health plan on the last day of the employee's employment, the plan should provide you a notice of your eligibility to elect COBRA and to receive the premium reduction. The notice should include any forms necessary for enrollment. You may also want to contact your plan directly to ask about taking advantage of the premium reduction. "
Posts: 8430 | From Not available | Registered: Oct 2000
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I have had Cobra and the Obama reduction program since April and this month is the 9th and last month that I will be paying the 35% of my very high premium. So, January 1st I have to pay $474 instead of $166. I just can't afford to keep the health insurance, but I also can't afford not to keep it because if I stop my treatment I will decline quickly.
I've tried county and state and can not find any assistance for a single woman that doesn't have kids. Do you know of any additional programs I could apply for to help me pay my cobra premium?
Posts: 1 | From Madison, WI | Registered: Dec 2009
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posted
Sorry, no. I only posted this info after wizard told us about it in another thread.
Maybe someone else will know as there are probably a number of lymies in this situation. Maybe you should start your own thread with a title like "Affordable health insurance?"
Posts: 8430 | From Not available | Registered: Oct 2000
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posted
For those of you who are now receiving the stimulus reduction -
Hang on, there is a strong possibility the the program will be extended. It may not be made public until December 31, or even later. If you can afford just one month, pay your Jan premium in full, then it can be applied towards future premiums if the program is extended.
I will post as soon as I hear something official from the HR groups. I wil get flooded with e-mails so it will not go unnoticed.
Can't hurt to call your politicians and plead your case, they are the ones who will be helping to make the decisions.
Scary as that sounds!
Wizard
Posts: 252 | From USA | Registered: Sep 2003
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Starfall1969
Frequent Contributor (1K+ posts)
Member # 17353
posted
We're in that same boat. We got the subsidy and had to pay *only* $400 or $500 instead of the $900+ it now becomes.
We switched over to Adult Basic coverage this month because we couldn't aford even one month at those prices.
Thank God the kids are on CHIP.
Of course, Adult Basic isn't the best coverage, and there is NO prescription coverage.
Posts: 1682 | From Dillsburg, PA | Registered: Sep 2008
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posted
The COBRA stimulus subsidy has officially been extended another 6 months, until 6/30/2010.
You can get more information at the Dept of LAbor Website.
Those of you on it, should just continue as you were prior to 12/31/09.
Happy holidays to all.
Wizard
Posts: 252 | From USA | Registered: Sep 2003
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Starfall1969
Frequent Contributor (1K+ posts)
Member # 17353
posted
I stand corrected.
I got my Doxy refilled the other day, and I only paid $6 for it, so apparently there is some prescription coverage.
And so far Adult Basic has been better than the crappy insurance we did have through COBRA.
Posts: 1682 | From Dillsburg, PA | Registered: Sep 2008
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posted
I have cobra and I live in CA. I was involuntarily let go and after much discussion with my former company they started covering the 65% of my premium in June. I am still out of work and my disability ends January 2010. Meaning I will have no income.
My insurance stimulous is only for 9 months right? So Starting Feb (bc I have to pay a month a head) I will have to pay $1100 a month to keep my health insurance.
Is there a way to lower that payment? I am still receiving disability until the middle of Jan so I cannot qualify for SSI or MediCal (which take 90 days to get a response).
I also haven't gotten to a point where I can opt for a HIPPA plan. Do you have any information that could help me lower that premium rate. FYI I am 25 years old.
The day you were involuntarily"let go" is the beginning of your COBRA period for which you are eligible for the 65% reduction.
It was originally 9 months, but has been extended another 6, as of last week. If you go on the Dept of Labor web site there is more info there. This is the address (I don't know how to make a link)
Do not let them bully you out of your 65%, they are not giving you a "gift" it is reimbursed by the Federal government through the Federal Stimulus package.
You may want to print out the DOL web info and take it in to them, in case they don't "know" about it. If you work for a very small company without a human resource professional, it is very confusing.
PM if you need more help.
Wizard
Posts: 252 | From USA | Registered: Sep 2003
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sammy
Frequent Contributor (5K+ posts)
Member # 13952
posted
Bringing this up for newer members. Thank you all for posting this here for us Posts: 5237 | From here | Registered: Nov 2007
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posted
this is great but only applies to people laid off not people like me that lost benefits due to illness........
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