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Senate Passes COBRA Premium Subsidy Plan

February 11, 2009
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Economic stimulus legislation that would provide federal COBRA health care premium subsidies for laid-off employees now is one step closer to passage.

Embedded in the stimulus bill approved February 10, by the Senate on a 61-37 vote is a provision for the government to pay 50 percent of COBRA health care premiums for up to 12 months for employees who are laid off from September 1, 2008, through December 31, 2009.

The legislation would require employers to locate employees laid off since September 1, 2008, who had declined COBRA to tell them they have a new right to opt for the health care coverage with the government picking up 50 percent of the premium.

Individuals would have 60 days after receiving a notification from their former employers of their new right to receive subsidized COBRA coverage. The subsidy would be prospective.

Congressional negotiators now have to iron out differences—including those involving COBRA—between the Senate stimulus bill and a stimulus bill earlier approved by the House of Representatives.

Under the House bill, the federal COBRA premium subsidy would be set at 65 percent and would last for up to 12 months. That measure also would allow employees terminating employment after 10 years with one employer and those 55 and older to retain COBRA until eligible for Medicare at age 65.


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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