CO­BRA gets an ex­ten­sion ...

... but will the un­em­ployed be able to af­ford it?

Modern Healthcare - - The Week In Healthcare - Re­becca Ve­sely

Un­em­ployed work­ers got a help­ing hand just be­fore the new year, but it’s still un­clear how many ul­ti­mately can af­ford to take it. Congress ex­tended a 65% pre­mium sub­sidy for the CO­BRA health in­sur­ance pro­gram un­til Feb. 28 and the max­i­mum pe­riod for re­ceiv­ing the sub­sidy an­other six months.

This means that most work­ers who lost their jobs af­ter Sept. 1, 2008, can keep the health cov­er­age they had through their em­ployer at a dis­counted rate for up to 15 months.

The sub­sidy ex­ten­sion was tucked into a $363 bil­lion fis­cal 2010 de­fense spending bill, signed by Pres­i­dent Barack Obama on Dec. 19.

“Mil­lions of un­em­ployed Amer­i­cans and their fam­i­lies will be bet­ter able to af­ford and keep their health ben­e­fit cov­er­age be­cause of this new law,” said Phyl­lis Borzi, as­sis­tant sec­re­tary of the Em­ployee Ben­e­fits Se­cu­rity Ad­min­is­tra­tion at the La­bor Depart­ment, in a writ­ten state­ment.

CO­BRA—the Con­sol­i­dated Om­nibus Bud­get Rec­on­cil­i­a­tion Act—al­lows work­ers to keep their health ben­e­fits up to 18 month pro­vided they pay the full cost of the pre­mium, in­clud­ing the em­ployer’s share.

The orig­i­nal nine-month sub­sidy of 65% of the pre­mium cost was in­cluded in the Amer­i­can Re­cov­ery and Rein­vest­ment Act of 2009, also known as the stim­u­lus law, signed by the pres­i­dent on Feb. 17, 2009.

The fed­eral gov­ern­ment has not yet re­leased num­bers on how many of the mil­lions of job­less na­tion­wide have taken ad­van­tage of the CO­BRA sub­sidy. The In­ter­nal Rev­enue Ser­vice is tracking up­take of the sub­sidy, but no of­fi­cial tally has been is­sued, a spokesman for the IRS said. The sub­sidy is given to the cov­er­age provider, such as an in­surer or em­ployer, through a tax credit.

One new anal­y­sis sug­gests that the sub­sidy has al­lowed many more un­em­ployed to keep their health ben­e­fits.

Av­er­age monthly en­roll­ment rates in CO­BRA health plans have in­creased by 20 per­cent­age points since the sub­sidy be­gan in March 2009, ac­cord­ing to the anal­y­sis by con­sult­ing firm He­witt As­so­ci­ates re­leased late last month.

He­witt looked at CO­BRA en­roll­ment rates for 200 large com­pa­nies, with 8 mil­lion work­ers, from March to Novem­ber 2009. Dur­ing that time, monthly en­roll­ment for those el­i­gi­ble for the sub­sidy av­er­aged 39%, up from 19% be­fore the sub­sidy went into ef­fect, in the pe­riod of Septem­ber 2008 to Fe­bru­ary 2009.

Some in­dus­try sec­tors saw CO­BRA en­roll­ment sky­rocket thanks to the sub­sidy, ac­cord­ing to He­witt. In the in­dus­trial man­u­fac­tur­ing in­dus­try, en­roll­ment rose to 67% from 7%. The re­tail sec­tor also saw large up­takes of the CO­BRA pro­gram among laid-off work­ers (See chart).

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.