Stimulus COBRA Subsidies Begin Expiring

Today, federal COBRA subsidies that help unemployed workers purchase health insurance from their former employers begin expiring. February’s stimulus bill provided 9 months in federal assistance, with the government paying 65 percent of a worker’s health insurance extension.

After 9 months of assistance, workers who began receiving payments in March are no longer eligible. Workers who become unemployed after December 31, 2009 will no longer be eligible for federal COBRA subsidies.

In February, CBO estimated that 7 million people would need the subsidies at a total cost of $25.7 billion to the government. Two Senators, Robert Casey (D-PA) and Sherrod Brown (D-OH), introduced legislation in early November that would extend the subsidies through June 2010 and increase the amount to 75 percent of workers’ premiums. It is likely that such an extension would appear in a jobs package that House leaders are working on. However, House Majority Leader Steny Hoyer said that Congress might not be able to pass such legislation until January.