Cobra Health Insurance and Stimulus Plan

For those of you who  do not know what the term COBRA means, it is a way to continue your health insurance benefits for a period of time after you are laid off. COBRA also applies if you are disabled or if you die and leave dependent children. In the past though you had to pay the full cost of the insurance. So few people were in a position to take advantage of this plan.  Company health insurance plans can easily cost $750 to $1,000 per m onth for a family, if they are good plans.

Now though as part of the federal government’s new stimulus bill there is a COBRA subsidy. The federal government will pay 65 percent of the premiums for up to nine months. As always, the new rules are confusing so here are some clarifications to commonly asked questions:

Who qualifies? - You need to have involuntarily (getting fired is not involuntarily losing your job) lost your job between September 1, 2008 and December 31, 2009. To get the full amount your annual income can’t excceed $125,000 (or $250,000 for joint return).

How do apply? - You apply through your former employer. Call the human resources department.

What if your company cancels its health insurance plan during your COBRA period? - In most cases COBRA is only available if the group plan still exists. If your company has a related company (affiliate, subsidiary, parent etc.) still offering the plan, you should be able to get on their plan.

What if your spouse has health insurance? If you’re eligible to join your spouses plan then you are not eligible for the COBRA deal.

For more information see our post on Womanwork.net called Should You Take the COBRA and What is HIPPA

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This entry was posted on June 11, 2009 at 2:48 am and is filed under Personal Insurance. You can follow any responses to this entry through the RSS 2.0 feed.