Five U.S. Sens. Urge Extension of Temporary Program to Help Unemployed Workers Afford Health Coverage

COBRA Subsidy Extension and Enhancement Act (S. 2730) Would Extend Temporary Subsidy to Help Unemployed Workers and Families Afford COBRA Coverage

WASHINGTON, D.C. – With families across the country set to lose federal subsidies that help them afford temporary health coverage during times of unemployment, five U.S. senators sent a letter to Senate leadership urging an extension of the COBRA Premium Assistance Program established in the Recovery Act. The letter was signed by U.S. Sens. Sherrod Brown (D-OH), Robert P. Casey, Jr. (D-PA), Al Franken (D-MN), Sheldon Whitehouse (D-RI), and Robert Menendez (D-NJ).

“With millions of Americans no longer receiving employer-subsidized health insurance through work, it is imperative that we do all we can to limit the rise in the newly uninsured – and the subsequent increase in uncompensated care and Medicaid enrollment that would surely follow,” reads the letter, which was delivered to members of Senate leadership. “These critical improvements would allow more Americans the option of subsidized COBRA coverage during these hard economic times.”
 
The COBRA Subsidy Extension and Enhancement Act (S. 2730), introduced by Brown and Casey, would extend the duration of COBRA coverage subsidies and increase the percentage of premiums covered by the program. 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.  If Congress fails to act, many families will lose this temporary assistance starting on Dec. 1, 2009.

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 would extend the subsidy to workers whose hours are reduced to such a degree that they lose eligibility for employer-sponsored health benefits.
 
This legislation would also extend by six months the time window in which workers can become eligible for the subsidy, to June 30, 2010. Currently, only workers who become unemployed in the next month 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.

A full copy of the letter can be found below.

Dear Majority Leader Reid and Minority Leader McConnell,

We are writing to urge quick action on legislation we recently introduced, the COBRA Subsidy Extension and Enhancement Act of 2009 (S. 2730). 

This bill would provide much needed assistance to those unemployed Americans looking for work in a struggling economy.  If we don’t act, thousands will see a spike in their health insurance premiums starting next month.  That’s because the Consolidated Omnibus Budget Reconciliation Act (COBRA) Premium Assistance Program we established as part of the American Recovery and Reinvestment Act of 2009 (ARRA) will phase out beginning December 1, 2009.

All reports indicate that the COBRA Premium Assistance Program has been a success, allowing recently laid-off workers to keep their health insurance.  Without premium assistance, COBRA continuation coverage is prohibitively expensive.  And with millions of Americans no longer receiving employer-subsidized health insurance through work, it is imperative that we do all we can to limit the rise in the newly uninsured – and the subsequent increase in uncompensated care and Medicaid enrollment that would surely follow.

Under current law, the COBRA Premium Assistance Program provides a 65% subsidy on COBRA premiums for nine months to those involuntarily terminated between September 1, 2008 and December 31, 2009.  Our bill would increase the subsidy amount from 65% to 75%, lengthen the duration of the subsidy from nine months to 15 months, and extend the termination deadline from December, 2009 to June, 2010.  S. 2730 would make those workers who see a severe reduction in their hours – and are thus no longer offered employer-subsidized coverage – eligible for the COBRA Premium Assistance Program.  Finally, our bill would provide workers who are offered retiree health benefits – currently excluded from the program – access to the subsidy.  These critical improvements would allow more Americans the option of subsidized COBRA coverage during these hard economic times.


We submitted S. 2730, which has been endorsed by the United Auto Workers and the Coalition on Human Needs, to the Joint Committee on Taxation (JCT) for a cost estimate on November 6, 2009.  We look forward to hearing back from JCT and beginning debate on the Senate floor.  We hope you agree that this issue deserves our urgent attention. 

In addition to acting on S. 2730, we encourage you to move forward with an extension of federal benefits for long-term unemployed workers through the end of 2010.  Four out of five of our individual States, due to an unemployment rate in excess of 8.5%, are eligible for the additional six weeks of unemployment insurance provided in the Worker, Homeownership, and Business Assistance Act of 2009.  Without an extension, our States will not be able to take advantage of the additional weeks, which would greatly benefit our unemployed constituents.  Even worse, if we do not extend these important programs and protections into 2010, workers exhausting their state benefits or finishing up tiers of Emergency Unemployment Compensation in 2010 will have no source of income whatsoever.  In January alone, 1.1 million unemployed workers will have no benefits at all if Congress does not act.

Thank you for your consideration.


Sincerely,

Sherrod Brown            Robert P. Casey, Jr.
U.S. Senator             U.S. Senator


Al Franken               Sheldon Whitehouse
U.S. Senator             U.S. Senator


Robert Menendez
U.S. Senator


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