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.
Federal COBRA Health Insurance Subsidy Expires April 5
March 30, 2010 – The federal subsidy helping unemployed Americans maintain their group health insurance benefits will expire on April 5 while federal lawmakers are on recess.
The U.S. Senate recessed on March 26 without approving a measure extending the federal COBRA health insurance subsidy for the unemployed, which expires March 31. The Senate is scheduled to resume session on April 12 and is expected to approve extending the federal subsidy through the end of the year. Funding for the federal unemployment benefits extension for unemployed Americans using up their initial six months of unemployment expires April 3, affecting an estimated 1.2 million Americans.
The federal COBRA health insurance subsidy program helps workers who lost their jobs due to the recent economic downturn maintain their prior group health insurance coverage by paying about 65 percent of the premiums. The COBRA subsidy initially lasted 9 months, but with the United States facing its worst job market in decades, an estimated 7 million unemployed Americans would have begun losing their subsidy on Feb. 28.
The latest extension was approved after Senate Democrats cut a deal allowing a floor vote on a funding measure for the temporary extension through April 5. U.S. Senator Jim Bunning (R-Kentucky) previously blocked a $10 billion spending bill providing funding to extend the COBRA health insurance subsidy program as well as the National Flood Insurance Program, federal unemployment benefits and federal highway projects, among others. Bunning objected to Democrats’ plans to add to the already record-level federal deficit, instead favoring using unallocated federal stimulus funding to fund the programs.
But Senate Democrats eventually agreed to allow a floor vote on an amendment sponsored by Bunning requiring the $10 billion come from the unallocated portion of the $787 billion federal stimulus bill approved last year. The amendment was defeated, after which the Senate voted to approve the funding measure and sent it to President Barack Obama, who signed it into law.
The $787 billion federal stimulus package approved last year allocated funds to help unemployed Americans continue their health insurance benefits through the Consolidated Omnibus Budget Reconciliation Act of 1986 – popularly known as COBRA.
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, 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.
COBRA Health Insurance Subsidy Extended for Unemployed Americans
Jan. 5, 2010 – Federal officials have approved extending the federal COBRA subsidy program, temporarily enabling workers who lost their jobs due to the recent economic downturn to maintain their prior group health insurance coverage without paying the full premium.
The federal COBRA subsidy initially lasts 9 months, but with the United States facing its worst job market in decades, an estimated 7 million unemployed Americans began losing their federal COBRA subsidy on Dec. 1. Although the subsidy expired in December, federal lawmakers failed to extend it until this week. The unemployed now have an extra 6 months to seek new employment and continue receiving their COBRA subsidy.
The extension applies to unemployed Americans currently receiving the COBRA subsidy or who recently used up their 9-months’ of program eligibility. Those who already dropped their health insurance after losing their subsidy last month can re-enroll and qualify for the subsidy extension. Those who already began paying the full health insurance premium amount after losing their COBRA subsidies might be eligible for program credits or reimbursement for maintaining their health insurance coverage.
The $787 billion federal stimulus package approved earlier this year allocated funds to help unemployed Americans continue their health insurance benefits through the Consolidated Omnibus Budget Reconciliation Act of 1986 – popularly known as COBRA. COBRA allows unemployed Americans to continue their group health insurance benefits for up to 18 months when they lose their jobs but requires them to pay the full premium – including any amounts their former employers paid to provide the health care benefits.
When federal officials approved the $787 billion federal stimulus package, they included a provision providing a federal subsidy to pay for 65 percent of health insurance benefits extended through COBRA, but the additional benefit would last only nine of the 18 months for which COBRA can last.
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, 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.
The federal subsidy program began in March with Americans being eligible if they qualify for federal COBRA benefits continuation and were laid off or lost their jobs between Sept.1, 2008, and Dec. 31 of this year. Individuals cannot have annual incomes exceeding $145,000 while families are allowed to up to $290,000 in income to receive the additional benefit. People eligible for federal Medicare benefits or another group health insurance plan do not qualify for the COBRA subsidy.
U.S. citizens with adjusted gross incomes of between $125,000 and $145,000 for individuals and $250,000 to $290,000 for spouses filing joint income tax returns must repay a portion of the additional benefit when filing their annual income taxes. Individuals earning less than $125,000 in adjusted gross income and families less than $250,000 are not required to repay any of the benefit.
The Congressional Budget Office estimated a total of 7 million Americans would participate in the program when enrollment began in March.
Travelers Advises Uninsured Auto Coverage as More Skip Auto Insurance
Jan. 28, 2009 – A recent study by the Insurance Research Council indicates that by the year 2010, nearly one in six motorists in the United States will be driving without state-mandated auto insurance due to rising unemployment rates. Officials for the nation’s first provider of auto insurance, The Travelers, are reminding consumers that not only is it extremely unwise to drive without auto insurance coverage, it is against the law in all but two states.
“Dropping auto insurance coverage should never be an option as a way to save money,” said William Pearse, vice president of product strategy and design for Travelers. “Not having auto coverage could mean financial ruin if you are in an accident where property is damaged or individuals are injured.”
The Insurance Research Council report indicates a strong correlation between the nation’s unemployment rate and the number of motorists driving without auto insurance coverage. And the increasing rate of uninsured motorists across the nation makes it even more important for drivers to ensure they have adequate auto insurance coverage to not only ensure they abide state laws but to protect themselves against damages caused by uninsured and underinsured motorists, according to Travelers.
The auto insurer suggests Americans can reduce their auto insurance costs while still properly protecting their assets and financial interests. Bundling insurance policies with the same insurance company, such as homeowners insurance or renters insurance along with auto insurance protection can produce significant discounts on both coverages.
Many auto insurance companies also provide discounts for owners of hybrid cars, maintaining good grades in college and owning a car with air bags, anti-lock brakes and anti-theft devices installed. Increasing auto insurance deductible amounts is another good way to maintain necessary auto insurance protection without greatly increasing the risk of suffering a major financial loss in an auto accident.
Even in the only two states that do not require auto insurance coverage for motorists, Wisconsin and New Hampshire, drivers still must prove they have the means to meet financial responsibilities that might arise in an auto accident in which they are at fault. Motorists in those states in particular are advised to carry underinsured and uninsured motorists protection on their auto insurance policies. Even if not at fault in an accident with an uninsured motorist, the potential medical and repair costs could cripple the finances of many American families, according to Travelers officials.