COBRA Subsidy Extension Removed From Jobs Bill
Experts say there is overwhelming congressional support to extend COBRA premium subsidies and that the COBRA provisions in the scrapped bill are likely to be attached to any one of several other bills that Congress will consider in the coming weeks.
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February 12, 2010
COBRA Subsidy Extension Removed From Jobs Bill
Senate Majority Leader
Harry Reid, D-Nevada, on Thursday, February 11, scrapped a bipartisan jobs bill
that included provisions to extend and expand federal COBRA premium subsidies to
laid-off employees, as well as temporarily ease pension plan funding rules, in
favor of a narrower measure that he intends to bring to the Senate floor
soon.
Benefits experts say there
is overwhelming congressional support to extend COBRA premium subsidies and that
the COBRA provisions in the scrapped bill are likely to be attached to any one
of several other bills that Congress will consider in the coming weeks.
The COBRA provisions
remain uncontroversial, and instead of going out on this train, they may go out
on the next train. Employers should expect the subsidy to be extended,” said
Frank McArdle, a consultant with Hewitt Associates in Washington.
Under the original jobs
bill—unveiled in draft form but never formally introduced by Senate Finance
Committee Chairman Max Baucus, D-Montana, and Sen. Charles Grassley, R-Iowa, the
panel’s ranking minority member—the current COBRA premium subsidy provided to
involuntarily terminated employees would have been extended by an additional
three months so employees laid off in March, April and May of this year would be
eligible for the 65 percent subsidy for up to 15 months.
Under current law,
employees involuntarily terminated from September 1, 2008, through February 28,
2010, are eligible for a 15-month premium subsidy.
In addition, the draft
bill would allow employees who lost group health insurance due to a reduction in
the number of hours they work and were involuntarily terminated later to receive
the COBRA premium subsidy, assuming certain conditions were met
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