When Congress passed the American Recovery and Reinvestment Act in February, a provision to offer unemployed workers a subsidy to help pay for health insurance coverage offered under COBRA grabbed the attention of HR professionals throughout the nation.
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Under the stimulus plan, the government will pay 65 percent of COBRA health insurance premiums for people who lost or will lose their jobs between Sept. 1, 2008, and Dec. 31, 2009. The subsidy payments will last for nine months and are available only to unemployed workers who don't have another source of group health insurance.
Workers who lost their jobs after Sept. 1, 2008, and didn't apply for COBRA coverage get a second chance. Employers must send workers laid off after Sept. 1, 2008, a notice by April 15, 2009, about the subsidy option. These laid-off employees will have 60 days after receiving the notice to sign up for COBRA coverage.
Depending on income levels, individuals will have to report the COBRA subsidies on their 2009 tax returns. Subsidy payment began in March. The subsidy, however, will not cover COBRA premiums paid between Sept. 1, 2008, and March 1, 2009.
