After losing a job, one of the primary concerns for many individuals is their loss of health insurance. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows workers and their families who lose their health benefits due to circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events, the right to choose to continue group health benefits provided by their group health plan for a limited period of time. One main problem however for many individuals who have lost their job is how they are going to pay for this coverage as it is generally much more expensive than their health insurance premiums had been when they were employed.
The American Recovery and Reinvestment Act of 2009 (ARRA) signed into law by President Obama on February 17, 2009, provides a significant reduction in premium cost for COBRA to certain qualified individuals and also expanded eligibility for COBRA. Under the ARRA, individuals may be eligible to pay a reduced premium amount that is only 35% of the premium costs for your COBRA coverage for up to 9 months.
To qualify for this reduction the individual must be qualified for COBRA because they or their family member were involuntarily terminated between September 1, 2008 through December 31, 2009.
If you qualify for this reduction but have already declined COBRA or elected COBRA but later discontinued it, you may have another opportunity to elect COBRA coverage and pay the reduced rate.
For more information on COBRA and the ARRA’s subsidies available, visit the Department of Labor’s website.