COBRA Benefits Have Been Expanded

Posted in Health Insurance

December 23rd, 2009

On Monday, President Barack Obama signed a measure that would extend COBRA benefits for millions of workers who were involuntarily terminated from their employer group plans. The extension, which was set to expire for many on Dec. 31, 2009 will now be extended for an additional six months.

The COBRA subsidy allows workers to extend their employer-based health insurance benefits while laid off from their jobs for an additional six months. While workers typically don’t enjoy the same costs for their benefits as they would have when employed, they do get to take advantage of the same level of coverage.

Since so many workers were laid off due to the financial crisis in 2008, Obama approved of a subsidy that would pay up to 65 percent of each individual’s benefits, to help them better pay for the costs via their unemployment checks. Without the subsidy, the full annual average health plan cost in 2009 for a family would have been $13,375 for a family and $4,824 for an individual, according to the Kaiser Family Foundation.

In addition to giving already laid off workers benefits for an additional six months, the subsidy has been extended to workers who will be laid off up to Feb. 28, 2010. With the first extension that granted nine extra months with the subsidy, beneficiaries may be granted up to 15 additional months to take advantage of government assistance.