President Obama Extends COBRA Subsidy
Paul April 16, 2010
Yesterday President Obama signed into law an extension for the existing COBRA subsidy for employees that were involuntarily terminated from April 1st to May 31st. The subsidy provides a 15 month long 65 percent premium subsidy to employees to assist them during their transition to new employment. President Obama is looking to legislators to extend the subsidy to employees that were terminated for the whole year.
The COBRA subsidy was fist enacted in 2009 as part of the American Recovery and Reinvestment Act to provide affordable health insurance coverage for recently terminated employees. According to USA Today COBRA enrollment has increased by 20 percent when no subsidy was available.
In addition, workers that let their COBRA lapse due to their subsidy expiring can re-active their COBRA with the subsidy if they pay back premiums.