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COBRA health insurance subsidy extended by feds

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COBRA health insurance subsidy extended by feds

15-month premium assistance for unemployed

Workers who become unemployed in January and February may qualify for a 65 percent subsidy of their health insurance premiums, and the length of that subsidy was extended to 15 months, according to the Internal Revenue Service.

Newly unemployed workers, along with those already receiving the subsidy, may be eligible for up to 15 months of assistance with their COBRA health insurance coverage.

The COBRA assistance program was originally set to expire at the end of 2009, and was limited to nine months.

The Department of Defense Appropriations Act, 2010, enacted on Dec. 19, extended the eligibility period and the maximum duration of COBRA premium assistance.

As a result, workers who are involuntarily terminated between Sept. 1, 2008, and Feb. 28, 2010, may qualify for a 65 percent subsidy of their COBRA premiums for up to 15 months. Involuntarily terminated employees who meet certain other requirements, and certain family members of those individuals, are referred to as "assistance-eligible individuals."

Employers must provide COBRA coverage to assistance-eligible individuals who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a tax credit.

Taxpayers with incomes exceeding $145,000, or $290,000 for those filing joint returns, do not qualify for the subsidy.

Health plan administrators must notify those eligible by Feb. 17.

For individuals whose nine months of subsidy have already ended, the law also provides for the retroactive payment of their 35 percent share during a transition period.

COBRA extension quick facts

  • Workers who have lost their jobs may qualify for a 65 percent subsidy for COBRA premiums for themselves and their families for up to 15 months.
  • Eligible workers will have to pay 35 percent of the premium to their former employers.
  • To qualify, a worker must have lost their job between Sept. 1, 2008, and Feb. 28, 2010.

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