Obama’s COBRA Changes
January 29th, 2009 Posted in Business Insurance, COBRA/State Continuation, Health Insurance, politicsOccasionally I am asked when a person who is on COBRA will be off the group plan. Often times the COBRA participant is sicker than the general employee population and is therefore holding the group back from switching insurers and getting lower premium rates for everyone.
The answer has been 18 to 36 months depending on the qualifying event. Now, however, under President Obama’s plan the answer could be when the participant becomes eligible for Medicare (age 65 to 67)!
As part of the stimulus bill, Congress (H.R. 598 and S. 29) is considering proposals that would force taxpayers to subsidize COBRA premiums for those who are out-of-work. A couple of the highlights:
Employees who are at least age 55 or had 10 or more years of service would be allowed to stay on the group plan under COBRA beyond the typical 18 month deadline. This coverage could continue until any other termination reason occurs namely Medicare entitlement or failure to pay COBRA premiums.
The new law will require taxpayers to provide premium assistance (65 percent of the COBRA premium) for up to 12 months for those who elected COBRA from September 1, 2008, through December 31, 2009. It would apply to employment terminations for reasons other than gross misconduct. Employers will go through an awkward system of paying the premium to the insurer and then getting a credit on payroll taxes.
Sadly, many employees don’t appreciate how much their employer pays for health insurance on their behalf until they get that first COBRA premium bill. Yes, insurance is expensive, but then so is that unexpected $50,000 surgery!
Eventually the Federal stimulus bill funds will dry up and politicians will be forced to take away the benefit or, more likely, make employers or the states subsidize COBRA premiums.
I predict that these changes proposed by Obama will drive up the cost of private health insurance and force more people onto taxpayer subsidized plans (COBRA, Medicaid, SCHIP) – all of which is a stated goal of those promoting nationalized health care.
Well, we did ask for change…
One Response to “Obama’s COBRA Changes”
By Angus McRae on Feb 19, 2009
As the stimulus bill was passed several days ago you will note that the provisions to allow certain employees to continue COBRA to Medicare entitlement were dropped. The premium assistance provisions survived however.