As if having to search for a new job after a layoff isn't enough stress, jobless workers must consider how they'll get health care coverage without their old employers' plans. COBRA, short for the Consolidated Omnibus Budget Reconciliation Act passed by Congress in 1986, requires most group health care plans to provide a temporary continuation of coverage that an employee would typically lose after termination.
The downside to COBRA has been cost, but the American Recovery and Reinvestment Act of 2009 calls for a 65 percent subsidy toward group health insurance premiums for laid-off employees. Here are six facts about the COBRA subsidy under the stimulus plan.
- The subsidy only lasts for nine months.
- You're eligible if you were laid off between Sept. 1, 2008 and Dec. 31, 2009.
- To qualify for the subsidy, individuals must make less than $125,000 and families can't earn more than $250,000.
- You are not eligible for the subsidy if your employer went out of business.
- If you’ve already made COBRA payments, there's no provision for a retroactive credit for the previous payments.
- If you missed your 62-day window for signing up for COBRA coverage (but were laid of in the eligible time period), the door is open for you to sign up again.
Are you currently paying for COBRA coverage?