PROVIDENCE – The Rhode Island Business Group on Health (RIGBH) has published an issue brief explaining changes that the economic stimulus package has made in the way workers who lose their jobs can continue their benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
The American Recovery and Reinvestment Act of 2009 includes a temporary federal subsidy to cover 65 percent of the cost of COBRA coverage for eligible individuals, effective March 1.
To qualify, workers must have lost their jobs (except due to gross misconduct) between Sept. 1, 2008, and next Dec. 31. Eligible family members may also qualify. The subsidy does not cover people entitled to COBRA due to divorce, loss of dependent status, death, or reduced hours.
Whereas before, workers had to pay the full cost of their coverage, which is available for up to 18 months, now the federal government is requiring employers to cover 65 percent of the cost and then take the money as a credit against federal tax withholdings and payroll taxes.
The maximum period of subsidized COBRA coverage is nine months, followed by unsubsidized coverage for up to nine more months, for a total of 18 months of COBRA coverage from the date of qualifying event as under current COBRA law. The subsidy would terminate upon offer of any new employer-sponsored or Medicare coverage.
The Rhode Island Business Group on Health is a public policy group focusing on health care and insurance issues. Its goals include encouraging communication between government and business and promoting a “financially responsible” health care cost- structure. For more information, go to www.ribgh.org.
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