More COBRA Subsidy Questions

My post last week on the subsidy available for COBRA coverage prompted a number of follow-up inquiries. Here are your questions....

Will the 65% reduction in premiums be in the form of a tax rebate or will the government actually pay the premium?

Employers will actually be paying the portion of the premium that is subsidized and, later on, they will receive a credit on their payroll tax returns.

My husband lost his job in July 2008 and we elected COBRA coverage -- will we be eligible for the subsidy?

Unfortunately, it looks like you will not be eligible. To qualify for the subsidy, you must have been let go after August 31, 2008 (and before January 1, 2010)

If I left my job voluntarily during the qualifying period, am I eligible for the subsidy?

No, you must have been involuntarily terminated. Also, even if you were involuntarily terminated, you are not eligible for the subsidy if you have access to another group health care policy (i.e. through a spouse)

If you lost your job during the qualifying period but did not elect COBRA coverage during the initial 60 day window, will you be eligible for the government subsidy?

The good news here is that you will be offered a second chance to elect COBRA coverage and qualify for the subsidy. By April 18, 2009 companies and/or their insurers must notify employees terminated after August 31, 2008 of this option. If you don't want to wait that long, contact your previous employer and let them know that you would like to elect COBRA coverage under this second chance window.

My company went bankrupt on 12/31/08 -- will I be eligible for the subsidy and benefits?

Unfortunately, no. When a company ceases to exist, they are not required to offer COBRA coverage.

I lost my job in November and elected COBRA coverage. How will the subsidy work? How do I get it and will it be retroactive?

Starting with your first COBRA premium payment due after February 17th (most likely your March 1st payment) you are only required to pay 35% of the premium -- but there will likely be some paperwork that you need to sign. If you have not received this paperwork, contact your previous employer and/or insurer and ask about it. If you end up paying the higher premium for a month or two until all the paperwork gets signed, you are eligible for a refund later. Remember that this subsidy will not be retroactive and it will only be in effect for 9 months once started.

Where can I get more information on the particulars of the COBRA subsidy?

Check out this website for more information.