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Economic Stimulus Bill Offers Relief on COBRA Premiums

California Health Advocates > News > Medicare & Other Health Insurance > Economic Stimulus Bill Offers Relief on COBRA Premiums

Posted by Karen Fletcher on February 23, 2009

The $787 billion economic stimulus bill that President Barack Obama signed into law last week includes some relief on COBRA premiums. COBRA, the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 (PDF) is the federal law that gives certain employees the right to continue their group health insurance when it would otherwise end, such as when being fired or laid off from work. This coverage is generally for 18 months, though in California it can often be extended to 36 months. While COBRA gives people important continued access to health coverage, the one problem with it  is it can cost people $1,000 a month or more to keep the coverage.

Yet, now with the stimulus bill, the federal government will subsidize 65% of a person’s COBRA premium for up to 9 months. To be eligible, you need to have been forced out of your job between Sept. 1, 2008, and Dec. 31, 2009. Also, your income in the year you receive the subsidy cannot be more than $125,000 for individuals or $250,000 for married couples filing their taxes jointly.

If you lost your job after Sept. 1, 2008, and declined Cobra coverage, you’ll now get another chance. Call your former company in the next two months to find out how this will work.

If you also have Medicare or are about to become eligible for Medicare and have questions about how COBRA works with Medicare, contact your local Health Insurance Counseling and Advocacy Program (HICAP) at 1-800-434-0222.

In addition, see:

  • Our recent news article, Know Your Rights to COBRA? – Extended Healthcare Benefits for Terminated or Reduced Employment; and
  • Website section, COBRA and CalCOBRA.

Filed Under: Medicare & Other Health Insurance

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About Karen Fletcher

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

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