More affordable health insurance for the recently laid off
As part of the economic stimulus package passed by Congress, the federal government is going to step in and pay some of your health insurance premium if you were recently laid off from a job that is covered by COBRA.
Companies with at least 20 employees are required to offer health insurance for up to 18 months to former employees. The way it works though is that the ex-employee must pay 100% of the entire premium bill, and often can also be hit with a 2% administrative fee. That makes staying on your ex-employer’s plan financially tough. Under the new economic stimulus legislation, your employer will pick up 65% of the cost for the first nine months that you use COBRA coverage, leaving you to cover a more manageable 35%. (Your employer will then be able to recoup its cost through tax credits.)
ACTION STEP: You know I am adamant that you can never afford to go without health insurance. Now this new assist from the federal government should go a long way to help you stay insured if you have been laid off.
The government coverage is available to anyone who was laid off between Sept 1, 2008 through the end of 2009, and whose employer does in fact provide COBRA health coverage for former employees. If you were laid off since Sept 1, but you turned down your employers COBRA offer, you now have 60 days to contact your old company and ask to enroll in the insurance program. You will be charged for 35% of the cost and your employer will recoup the other 65% directly from the government.