January 22, 2009 - COBRA expansion possible as part of the $825 billion economic stimulus package
The House Ways and Means Committee marked up a bill that could subsidize the cost of continuing group health coverage for laid-off workers and cut workers’ share of the premiums to 35%.
Ways and Means members voted 24-13 to approve the bill, H.R. 598, the American Recovery and Reinvestment Act of 2009. Title III of the bill is the Health Insurance Assistance for the Unemployed Act of 2009.
Currently, COBRA (Consolidated Omnibus Reconciliation Act), requires employers with 20 or more employees that provide group health benefits to to provide access to continuation benefits for 18 months. Employers and health insurers can charge the workers who take up the coverage 102% of the usual premium.
Under H.R. 598, laid-off workers could continue health benefits for 12 months by paying just 35% of the premiums. The government would pay the remaining 65% of the premiums. Group health plan members laid off without cause could keep subsidized continuation benefits for 12 months, or until they received new major medical coverage.
Laid-off workers receiving the subsidized benefits would not lose the benefits if they become eligible for a more limited plan, such as a dental plan or a wellness plan.
The bill also would require employers to permit involuntarily terminated individuals ages 55 and older to continue group health benefits until they become eligible for Medicare or employers discontinue health plans subject to coverage continuation requirements.
Similarly, any involuntarily terminated worker in an affected group health plan for more than 10 years could keep COBRA coverage until becoming eligible for Medicare.
House leaders will combine H.R. 598 with other bills to create H.R. 1, a new American Recovery and Reinvestment Act, and bring the bill up for a vote on the floor the week of January 26 committee leaders say.