Stimulus Aims To Help Laid Off Workers Retain Health Insurance
From listening to the talking heads on the news, the stimulus bill has generated nearly as many strong feelings as last year’s election. But the provision that will allow for federal assistance with COBRA premiums seems like a people pleaser all around.
For starters, the beneficiaries are individual people, not corporations. The health insurance provision in the stimulus package will allow the government to pay for 65% of the COBRA health insurance premiums for people laid off between September 1, 2008 and December 31, 2009. The assistance will continue for up to nine months.
Another plus is that the provision only applies to people who were laid off – not those who left voluntarily. So it is clearly aimed at helping people who have been directly impacted by the recession. There is an income limit of $125,000 for an individual and $250,000 for a married couple who file a joint tax return. People who have been laid off and are job hunting and/or receiving unemployment benefits will probably fall well under these limits, so the income cap probably won’t have much of an impact. Personally, I’d prefer to see it be a little lower. Families USA pegs the average COBRA family health insurance premium at $1069/month, which is a considerable sum of money. But it seems that a family earning $249,000/year should be able to pay the premiums without assistance. That’s my only complaint about the health insurance assistance provision in the stimulus package, and as I mentioned, most recipients are likely to fall well below that income mark anyway.
We frequently talk with clients in Colorado who are trying to decide between continuing their group health insurance policy through COBRA or getting an individual health insurance policy on their own. For people who know they’ll be needing to get their own health insurance long term, an individual policy makes sense. But for people with health conditions, COBRA is often the best (sometimes only) option. Until they get the paperwork and see how much it’s going to cost. The stimulus bill will now make it a more affordable option for people who have been laid off. The number of Americans without health insurance is already way too high. And since most people get their health insurance from an employer, the rising unemployment numbers were sure to drive the number of uninsureds higher. Hopefully the stimulus bill will help to mitigate the problem for a while. And hopefully the economy will get back on track by the end of the year when the government assistance program is scheduled to end.
The provisions for the government to pay a portion of the COBRA costs is definitely a crowd pleaser. So many people are upset over the stimulus package, on both side of the aisle, that SOMETHING needed to be done to make is less negative to a greater percentage of the populus.
The problem with trying to please everyone [the "everyone gets a statue" mentality] is that what really happens are things either get buried in the avalanche of STUFF, or what we are told is a great provision is really just a diversion from the negative.
People need help and while this is clearly a great start for many people, there are even more who will get nothing: simply because they humnker down, stay at jobs they hate, and are afraid to leave for something they may feel better about doing.
Our country needs EVERY DAY relief, not just for bailing out one group or another, who made bad choices that everyone heas to pay for. But rather something that TRULY is for EVERYONE.
Is there any Cobra assistance for those laid off before September 2008. I am still collecting unemployment insurance via an extention. My Cobra payment just went up $40.00 which leaves me with practically nothing. I need help. Is there assistance for me ?
Kristine Warning
Kristine,
As far as I know, the assistance is specific to those laid off after September 2008. Cobra typically only lasts 18 months, which means that the vast majority of people laid off before 9/08 are no longer on Cobra. I have seen discussion online from people trying to expand the subsidy, but as of yet I have not seen anything indicating that it will be expanded.
I would recommend checking to see if you qualify for Medicaid, or trying to get coverage through an individual health insurance policy if you are healthy. I wish you all the best.
i am in kristine’s boat. but ask miss norris: if you are laid off in june of 2008 and kept cobra insurance, you are, by my calculations and personal experience, into your 5th. month of paying premiums. how do you come up with the statement that most laid off before 9/08 are no longer on cobra. if you made a mistake. could you answer kristine’s question again. as i said i am in the same situation. my cobra coverage was 90 days by the employer then in oct. of 08′ began paying premiums of 550 a month.
Kristine and Joe – I apologize. It appears that my basic math skills were out to lunch when I wrote that last comment. Joe, thank you for bringing it to my attention.
I have double checked everything I can find about the stimulus package COBRA subsidy, and it all says the same thing: only people laid off after 9/1/08 are eligible. People who were fired for misconduct (as opposed to laid off) and people who left their jobs voluntarily are not eligible for the subsidy, even though they may be covered by COBRA. Here’s a link with some more details:
http://employmentlawpost.com/hrnews/2009/02/20/more-details-on-cobra-continuation-subsidy-in-stimulus-package/?HLW
And another article with details about the COBRA subsidy:
http://www.usatoday.com/money/perfi/columnist/block/2009-03-02-stimulus-cobra-health-premiums_N.htm
I hope this is helpful, and I apologize again for the confusion my last comment created!
Louise,
Thank you sooooo much for the links and info. That is stuff I’ve been looking for all over the web. I was let go right before Christmas and definitely not a time I would have left my job voluntarily. I’m glad I know the details.
I am a 56 year old widow who due to my husband being laid off and then passing away has had Cobra extended. Our Cobra began in September of 2006 and mine has been extended until September 2009. The premiums are high, but I have a lot of medical issues and need insurance. I still have not been able to find a full-time job and don’t know what to do when Cobra runs out. If I can not get medical treatment or perscriptions I am at risk. I thought the stimulus plan was supposed to allow those already on Cobra to continue coverage, even at the higher benefit amounts and those over 55 to continue indefinately.
I was laid off in December 2008, and I denied COBRA because of the high costs. Unfortunately and ironically, before I bought into another expensive form of unemployed health insurance, I got in a pretty bad accident. More than 40 grand in medical bills now. Does anyone know if this new stimulus bill pushes to allow COBRA to be picked up retroactively? I’ve been searching for a loophole since COBRA told me ‘no’ a month ago. I would beg and borrow to pay the premium back pay to avoid being on a medical bill payment plan for life.
Carolyn,
I’m sorry for all you’ve been through in the last few years. I think there’s a lot of confusion around the stimulus bill, mainly because we saw so many versions of it floating around during the legislation process, and people aren’t sure which parts made it into the final bill. Here’s a link to a detailed description of what the COBRA assistance package ended up looking like:
http://www.varnumlaw.com/News-Events/News/Stimulus-Act-Changes-to-COBRA
If you scroll to the bottom of section I, it says that the provision to extend COBRA for people laid off after age 55 was not included in the final bill.
If you live in a state with a high risk pool health insurance program, you could try that option. Here’s a link to high risk pool details by state:
http://www.naschip.org/states_pools.htm
I hope this helps, and I wish you all the best.
Monica,
I’m sorry about your accident, and the timing for it to occur while you were uninsured. Here are some good details about the COBRA provisions in the stimulus bill:
http://www.varnumlaw.com/News-Events/News/Stimulus-Act-Changes-to-COBRA
There is a provision to allow people who were laid off between September 2008 and Feb 17 2009 (and did not elect COBRA at the time they were laid off) to elect COBRA now. But it looks like the effective date will be after you enroll, rather than retroactive. They will still cover pre-existing conditions, even if the gap in coverage was more than 63 days, but it doesn’t look like they will go back and cover treatments that were provided while a person was uninsured.
How does one get signed up for the partial payment of COBRA? My daughter was laid off in Feb. 09, has not yet received any unemployment payments but thinks she has done everything she needs to do. She has a health issue and needs to keep her health insurance. I cannot find anything about how to apply to get some of the cost of health insurance paid.
Cathy,
Your daughter should start by contacting her previous employer if she has not yet received her COBRA paperwork from them. The stimulus bill is set up so that the laid-off employee pays 35% of the premiums, and the former employer pays the rest (then the employer gets a credit for the amount they paid when they submit their payroll taxes). I would recommend that she call her former employer to make sure that they are sending out the continuation forms she’ll need in order to elect COBRA. The premium subsidy should be taken care of between the employer and the government, but she should clarify when she talks to them that this is the case.
I was laid off on August 18th, 2008, but was provided with severance that amounted to about 3 weeks, as well as the company continued to pay my health insurance until December 31, 2008. Therefore, I applied for Cobra during December, 2008 to begin January 1, 2009 and have been paying for it ever since. It looks to me like the rules for Cobra under the stimilus package do absolutely nothing for me. Can you confirm that I am another “so sad, too bad” non-recipient of any relief through this “stimulating package”?
Jerry,
Unfortunately I think you’re correct in your conclusion. I visited the DOL website to double check the details:
http://www.dol.gov/ebsa/cobra.html
They refer to the time period from September 1, 2008 to December 31, 2009, and say that the stimulus is available to workers who became eligible for COBRA due to “an involuntary termination of employment that occurred during that period”. My understanding is that it doesn’t matter when the company stopped paying for your health insurance; eligibility is determined from the date you were laid off. But it does sound like your situation is a bit more complicated, since you became eligible for COBRA after September 1. Have you checked with your former employer about this?
Best of luck to you.
Got laid off ( budget cuts) small company 15 employees in Colorado. On Cobra now for health insurance which I need. ( got the premium reduction )Prexisting conditon. Crohns disease. On unemployment, got job offer now but job will only last 4-5 months.
Can I keep Cobra where I used to work if this new job does not offer me health insurance or the premiums will be more than my cobra.
Do you think I can go back on unemployment after sept if I do not get another job. thank you so much william
William,
If your new job does not offer you health insurance, you can keep COBRA while you’re employed in the new position. However, if you do become eligible for a new group plan that does not have pre-existing condition limitations, you might not be able to keep your COBRA plan. Here are some details from the Department of Labor:
http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML
Scroll down to question 14 for more information on this scenario.
As far as unemployment, I’m not sure how that system works with a situation like yours. I would recommend that you contact the unemployment office to find out whether you can go back on unemployment after your upcoming job ends in the fall.
I wish you all the best, and hope that you find a permanent job after this one ends.
will, if you go back to work, loose the job later , unemployment picks up wher you left off on initial claim. if you work more than 18 months at new job. new calculations will be made fron the newjobs income over the 18 months. i belive i am correct. ,joe
I am a union member in good standing with my construction union and have been laid off from a job in a completly different feild as of 10-16-09 I have Cobra thru 8-30-09 and then will continue with Union coverage until medicare at 65. I am being told by the stimulus contacts that I don’t qualify because the last layof was from a company that didnot have these benifits. The only reason I took the job was because was I needed the money to pay omongts other things my health insurance. Who the H is one 1st? That job was not in any way in conflict with the union, but it created cashflow that the union could not.
What do I have to do to challenge a negative decesion?
Raymond,
If you go to the Department of Labor website, they have a page devoted to COBRA and the subsidy that is available:
http://www.dol.gov/ebsa/cobra.html
On the left side of the page there is a column of links under the heading “for employees”. The first one is “review of subsidy denials”. Click on that link and you’ll see details about how to request a review if you’ve been denied access to the subsidy. The site includes all of the requirements that must be met, so that you can double check your case and make sure that you do indeed qualify. Then you send your review request and all supporting documents to the DOL. Good luck!
It’s a testament to the honesty of the American People that we aren’t using the same healthcare subsidy that so many illegal aliens already have: showing up to an emergency room with a fake name, fake address, and no ID. If we were jerks, we could easily put a burden on existing healthcare facilities that would make them completely fail.
What happened in the last thirty years that put seeing a doctor (and more importantly having an ongoing professional relationship with a doctor) out of reach of most Americans? The rise of the Health Insurance Middlemen and the slow erosion of middle class earning power. Everyone has to be a millionaire to get decent healthcare in America now. Its criminal.
I’m curious….I am just finishing up my maternity leave. I have to pay my premiums since the beginning of the year….the amount is outrageous and is going to be hard to pay back since I didn’t work during that time. Is there help out there to help me pay for it. We can’t afford to pay for it. Any help on where and what I need to do would be great. Thanks!
Christina,
Is it COBRA premiums that you have to pay back, or are you still employed there? If you quit your job (as opposed to being laid off), you wouldn’t qualify for the stimulus assistance. I’m not familiar with a scenario where someone has to pay back seven months of premiums. Did you receive benefits under the plan this year? I’m curious as to why the plan remained in force if your premiums weren’t paid up. If you didn’t receive benefits this year, can you drop the policy and apply for individual coverage?
My mom has recently been admitted to a hospital I beleive due to her layoff in March of 2009. She lost her job, then her house, a dog and just most recently the condo she was renting went into foreclosure due to non payment of the landlord. When she was employed she had health insurance and was on medication for anxiety and depression. If you do not know, these medications should be taken properly and never stopped without being monitered by a physician. When she was laid off she was covered for a month by her employer and then left on her own after that. Without insurance you have to pay for doctors visits and prescriptions and without a job that is next to impossible. So as a result she could not afford her medication let alone a doctors vistit and is now severely depressed and suicidal from coming off the medication cold turkey along with very high blood pressure brought on by side effects from the medication that should have been monitered b the physician that she could no longer afford to see. What kind of assistance is out there for her as she is currently being hospitalized w/o any insurance. Does the stimulus package apply to her and if so how?
Andrea,
I’m sorry your mom is going through such a tough time. The COBRA assistance is available to people who were laid off starting September 1 2008, through the end of this year. The stimulus package was set up so that the government will pay the subsidy directly to the COBRA administrator (your mom’s former employer, in this case). She (or you) should contact her former employer and inquire about what can be done. The stimulus package allows workers who were laid off and initially declined COBRA to go back and re-enroll, but I’m not sure about the time-frames involved in that process. Again, contact your mom’s former employer and ask if she can opt to elect COBRA now and get the subsidy. Good luck to both of you.
Is there a way to get an extention of Cobra after the 18 months? I have been unemployed for over a year now, but must keep the insurance for my Type I diabetic daughter. We pay $400 a month for Cobra coverage for her, but could not otherwise pay for her insulin or pump supplies without the coverage. I may not find employment and we are inching closer to the 18 month mark.
Thanks for any help.
Sabrina,
There are ways to extend Cobra beyond the initial 18 months, but there are very specific conditions that must be met. Here’s a website with details:
http://www.dol.gov/elaws/ebsa/health/employer/c11.htm?c=YNYNNYNYNNYNYY&CHNMW=
If you’re in Colorado, you can apply for Cover Colorado for your daughter (requires that Cobra coverage be exhausted in order to qualify). Here’s their link with more information:
http://www.covercolorado.org
If you’re outside of Colorado, you could check with your state division of insurance to see if there is high risk pool coverage available in your state.
Best of luck to you and your family.
The stimulus kind of forgot something: My wife was laid off in Nov.’09 and immediately took COBRA. With the ARRA help on her premiums,everything was ok. then,last week,her former company DROPPED it’s healthcare. guess what? NO MORE COBRA and therefore NO MORE ARRA HELP! the company pretty much told her in their letter that she was on her own to find another policy. ok, so she tries to get another policy but with her “pre-existing” condition (heart), only “cover colorado” will even talk to her and the premium we’ll have to come up with are outrageous. you’d think that the ARRA help would carry over but nobody seemed to think of this scenario I guess. sounds like we’re SOL,right?
tnx,
Ken,
I’m sorry about the difficulties you’re experiencing. This is absolutely a “crack” in the ARRA program. It’s also an issue for people who get laid off because their entire company goes out of business – in that case, the health insurance gets dropped and there’s no COBRA for any of the employees – and no assistance from ARRA.
Cover Colorado has a discount program available for people who have less than $50,000 in household income. I don’t know if you’re in that category or not, but if you are you can apply for the discount when you submit an application for coverage. Please note that Cover Colorado has a six month pre-existing condition waiting period for all applicants who have been uninsured for 90 or more days prior to getting Cover Colorado. So if you do decide to go with Cover Colorado, you’ll want to make sure that your wife isn’t uninsured for longer than 90 days between the end of her old policy and the start of Cover Colorado.
Best of luck.
I lost my job in Jan. 2009 due to budget cuts. Health insurace was covered for 1st three months. I did not elect COBRA coverage nor did I obtain other health insurance. I am now concerned that I will not be able to obtain health insurance even thourgh a group policy. Is this true or does it just apply to pre existing condiations like diabetes, for which I was previously covered? Any insight and/or guidance is appreciated.