COBRA Subsidy Extension Not Part of Unemployment Bill
July 20, 1020 – The U.S. Senate today is poised to enact another extension of federal unemployment benefits, but extending the federal health insurance subsidy for the unemployed likely will not be part of the final package.
With a replacement sworn in today for recently deceased Senator Robert Byrd of West Virginia, Senate Democrats once again have the 60-votes needed to overcome objections by Senate Republicans and force a final vote on extending unemployment benefits by up to 2.5 years at an estimated cost of $34 billion to U.S. taxpayers. The measure being debated, House Resolution 4213, the American Jobs and Closing Tax Loopholes Act of 2010, initially included a provision extending the federal COBRA health insurance subsidy through December. But the Senate stripped the provision from the bill, which is expected to gain Senate approval today with the House of Representatives concurring on any changes tomorrow.
The federal COBRA health insurance subsidy expired June 1, causing about 150,000 Americans each month to lose their health insurance benefits, according to the National Employment Law Project. A proposed amendment to HR 4213 would have extended the health insurance subsidy for up to six months, but it was stripped due to funding concerns.
The federal COBRA health insurance law allows laid-off and unemployed Americans to pay their employers’ prior group health insurance premium and remain insured for up to 18 months after losing their jobs. The COBRA subsidy was approved as part of the $787 billion federal stimulus package last year and paid 65 percent of the health insurance premium previously paid by job providers so unemployed Americans wouldn’t automatically lose their families’ health insurance protection.
About a third of eligible Americans used the federal subsidy at an annual cost of about $13,000 per family, according to the U.S. Treasury Department. But the subsidy was allowed to expire after Senate Majority Leader Harry Reid (D-Nevada) in May announced the Senate would recess and wouldn’t take up measures extending the program until at least June 7.
American families who recently lost their primary incomes due to unemployment have seen their average monthly health insurance benefits payments rise from about $389 per month while employed to $1,111 per month if choosing to continue them through COBRA while receiving no subsidy, according to the non-profit Families USA organization. A monthly health insurance premium of $1,111 uses up about 83 percent of the average monthly unemployment take-home benefits of about $1,332, according to Families USA.
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