The nicest part about getting severance was that my health insurance continued after I got canned. It was one less thing to worry about. After the severance period was up, though, there were lots of tough decisions. COBRA is insanely expensive. Continuing my group coverage through COBRA would have cost me almost $600 per month. I ended up going with Healthy NY at less than half that, but sacrificed some coverage in the process.
A recent study shows that for family coverage, COBRA eats up 84 percent of unemployment benefits on average. For individual coverage it’s a more “manageable” 30 percent. Either way, the outlook for paying bills and putting food on the table is grim.
The American Recovery and Reinvestment Act (that $787 billion stimulus bill that will likely be signed into law by week’s end) sets aside $24.7 billion to help offset the costs of COBRA. Uncle Sam will pick up 65 percent of your premiums by issuing a credit directly to your employee benefits provider. You are eligible for this subsidy for nine months if you were laid off on or after September 1st, 2008. Your nine months of eligibility start the first month that you receive a subsidy and no subsidies will be issued for premiums that you have already paid.
If you already opted out of COBRA, contact your former employee benefits provider. If they are willing to extend group coverage, you still qualify for this subsidy. Unfortunately for me, I got canned on August 27th — four days shy of eligibility!
To learn more about COBRA, check out this page on TheCanned.com.
February 12th, 2009 at 1:31 pm
killer cobra, dude.
February 18th, 2009 at 9:46 am
Sirs/Mesdames:
How does Stimulus plan COBRA subsidy actually work?
I have been unemployed since Dec. 1, 2008, and have been paying my COBRA insurance premium since January, 15, 2009.
Thank you,
February 18th, 2009 at 9:50 am
Sirs/Mesdames:
How does the Stimulus plan COBRA subsidy actually work?
I have been unemployed since Dec. 1, 2008, and have been paying my COBRA insurance premium since January, 15, 2009.
Thank you,
February 18th, 2009 at 5:49 pm
Your guess is as good as mine…Im so lost with how this works with the cobra , do we keep making payments ?
February 21st, 2009 at 4:05 pm
Monte & Sue, please check out our follow up article addressing your questions: http://www.thecanned.com/more-details-on-subsidized-cobra/
We also have a new article on Unemployment Benefits in the Stimulus Bill. You can view that here: http://www.thecanned.com/unemployment-insurance-in-the-stimulus/
Please let us know if you need any further clarification.
February 22nd, 2009 at 7:48 pm
[...] got a few questions following our post “COBRA Subsidy in Stimulus Package“. Here is the in-depth explanation of how this works. We will start with a crash course on [...]
February 24th, 2009 at 2:05 am
What will those of us who were unemployed prior to Sept. 2008 do for Cobra Subsidy.. I am now on UI extention… after 30 years in Financial Industry… No Jobs anywhere for me… What Do I qualify for… Geesh… this is a really sad joke
February 26th, 2009 at 8:35 pm
Is there any support for those of us who were laid off before September 2008 and have been suffering longer paying Cobra?
I thought there might be other state supported plans.
Any insight?
February 26th, 2009 at 9:38 pm
Millions of Americans who lost their jobs prior to September 1, 2008 could not afford Cobra. Millions more elected Cobra but have now depleted their resources and can not continue on. Still millions more with pre-existing conditions who rely on cobra to bridge the 18 month gap between their former employers insurance and their state’s high risk insurance pools are struggling to pay their premiums every month to prevent being locked out of insurance permanently.
Please join us in asking Congress and the Obama administration to eliminate the arbitrary September 1, 2008 cut-off date and 9 month limitation of assistance by signing our petition at ipetitions under cobrareform and telling your friends about our efforts.