Skip to content

Bill Would Extend and Expand COBRA Subsidy Included in Recovery Act; Subsidy Set to Expire on December 1 without Legislative Action

WASHINGTON, DC – U.S. Sens. Sherrod Brown (D-OH) and Bob Casey (D-PA) introduced a bill today to extend the “COBRA” subsidy which helps unemployed workers and their families afford temporary health care coverage. Many Families will lose this temporary assistance which will begin to expire on Dec. 1, 2009, if Congress fails to act. The bill is also cosponsored by Sen. Al Franken (D-MN).

“Unemployed workers should be able to focus on finding work, instead of worrying about how to afford medical care for their families,” said Brown. “This bill will make temporary health coverage more affordable and accessible for American families. No family should be one medical visit away from financial disaster.”

“When a worker loses their job they not only lose their income, they often lose their health insurance and create conditions for a perfect storm of financial insecurity,” Casey said. “This legislation will make health care coverage more affordable for laid off workers and bring some security in troubling times.”

COBRA allows workers who would otherwise lose employer-sponsored health benefits to stay on their current plan, but they must pay the entire premium, which can make the coverage prohibitively expensive. The American Reinvestment and Recovery Act of 2009 (ARRA) established a nine-month subsidy to help unemployed workers purchase temporary "COBRA" coverage for themselves and their families.

The original COBRA subsidy included in the Recovery Act was based in part on Brown’s Coverage Continuity Act (S.29) which he introduced in January, 2009. The provision in ARRA established a nine-month subsidy to help laid-off workers purchase COBRA coverage – with the federal government covering 65 percent of the health premium.  The goals of this legislation were to ensure coverage continuity and prevent a spike in Medicaid enrollment.

The COBRA Subsidy Extension and Enhancement Act (S. 2730), would extend the subsidy an extra six months to 15 months and increase the subsidy amount from 65 percent to 75 percent of the workers’ premium. Under the current COBRA coverage continuation, only laid-off workers are eligible for the subsidy. S. 2730 extends the subsidy to workers whose hours are reduced to such a degree that they lose eligibility for employer-sponsored health benefits.
 
This legislation will also extend the time window in which workers can become eligible for the subsidy by six months, to June 30, 2010. Currently, only workers who become unemployed in the next two months are eligible for the subsidy.

Workers who were eligible for the initial subsidy at the start of the program on March 1, 2009 will no longer qualify for this assistance on Dec. 1, 2009 unless this legislation passes.


# # #

Related Issues

  1. Health Care
  2. Jobs & Economy