Comments on: COBRA Expansion and Premium Subsidy Under The 2009 Stimulus Act

By: Patricia Larkin

Patricia Larkin — Sun, 25 Oct 2009 03:40:55 +0000

I was just laid off 10/22/2009 will my 35% cobra coverage go for 9 months?, or, as my fromer boss thinks end on 12/31/2009, and then I will have to pay full pop??? Help please
Patricia Larkin
Tucson, Az

By: Lisa Ferguson

Lisa Ferguson — Tue, 12 May 2009 00:20:15 +0000

This administration is really showing well.I just received my cobra subsidy quote from my previous employer and I am very pleased. Presubsidary my monthly rate would have to pay 643.00 per month vs 161.01.

Well Done
Lisa Fergvuson

By: Compliance Building · IRS Issues New Guidance on COBRA Subsidy

Compliance Building · IRS Issues New Guidance on COBRA Subsidy — Wed, 08 Apr 2009 18:47:42 +0000

[...] COBRA Expansion and Premium Subsidy Under The 2009 Stimulus Act – previous post [...]

By: Compliance Building · The New COBRA Subsidy: An Update for Employers

Compliance Building · The New COBRA Subsidy: An Update for Employers — Mon, 06 Apr 2009 11:03:01 +0000

[...] COBRA Expansion and Premium Subsidy Under The 2009 Stimulus Act [...]

By: Sian Gruffydd

Sian Gruffydd — Fri, 03 Apr 2009 03:07:45 +0000

For people in the “special election” period, they have 60 days to elect. Those people are the employees (with qualifying events between 9/1/08 and 2/17/09) who did not elect cobra or terminated due to non-payment. Their coverage would begin 3/1/09. You would not have to retroactively pay back to the insurance termination date.
Ordinarily during the cobra election period, you can decline coverage (by sending the form in stating you decline the coverage) and then change your mind and elect it if it is within that 60 day election period. Your coverage would begin on the date you furnish your election form to the employer or third party administrator. So, make a photocopy of the application (one for the decline and one for the acceptance).

By: Doug Cornelius

Doug Cornelius — Thu, 26 Mar 2009 01:55:23 +0000

Dave -

Thanks for the clarification. The details of COBRA and the subsidy are outside of my scope of knowledge.

My blog posts are mostly my notes on what I pick up. I generally only dive in as far as it interests me or as much as might need for my company.

As always, get competent legal advice and don’t rely on my notes!

By: Dave Atkins

Dave Atkins — Thu, 26 Mar 2009 00:53:04 +0000

My understanding of the law–and what my former employer told me–is that the Federal subsidy is NOT retroactive. The option to elect and the eligibility is, but in the case of an employee laid off on 12/31/08, that employee will still have to pay 100% of COBRA premiums for January and February 2009 until the Federal subsidy kicks in for March 2009. Also, even if an employee has not “used” health care in January and February, if that employee elects COBRA, the term predates to the termination date. So in the admittedly “edge case” I’m in, I have to pay January, February, and March by April 15. Rather than continue to debate the issue with my former employer, once I knew I qualified for MSP assistance, I elected COBRA on March 1 and conceded that I’d have to cough up the Jan/Feb money.

The language in the Act is confusing because as you described above, it talks about employers having to refund excess premiums paid. But on the DOL website FAQ:

Q18: I am an assistance eligible individual who has been enrolled in COBRA coverage since December 2008. Will I receive a refund of 65% of all the premiums that I have already paid?
No. The premium reduction provisions apply only to premiums for coverage periods beginning on or after February 17, 2009.

On a brighter note, Massachusetts has, in an amazing act of common sense, decided to continue the Medical Savings Program Premium Assistance subsidy of 80% for families who qualify (400% Fed Poverty level) AND apply it on top of the reduced premium. This means Mass residents who qualify for MSP will only end up paying 7% of the full cost of COBRA–a better deal than they had when they were employed.

By: Imee

Imee — Wed, 25 Mar 2009 11:35:17 +0000

I think this 65% subsidy by the government is a good move. It will not only give cool points to the Obama administration–it will save a LOT of money for many unemployed out there who are using COBRA.