Cobra Extension Subsidy FAQs:

Q: Since the subsidy has been extended, should I re-enroll in COBRA?

A: The first priority it to make sure you have some kind of health insurance coverage.  If you have already explored your Cobra Health Insurance alternative options and have found  that COBRA is your best option for health insurance coverage, then you should definitely re-enroll.  If your COBRA coverage has expired, you have 30 days to reenroll from the date that you’re notified of the extension by your benefits administrator. If you’re currently uninsured, be sure to check your coverage options because COBRA is not a long-term solution. The subsidy only lasts fifteen (15) months and COBRA only lasts eighteen (18) months.  It’s very simple to get free information on the coverage available to you.  Free quote comparisons can be found by clicking here.

Q:  If I cancelled my COBRA coverage before the subsidy was renewed in December 2009 and enrolled in a private insurance plan, can I try to re-enroll in COBRA now?

A: Yes you can, however, you will not be able to receive a refund for any premium payments you have already made on your individual health insurance policy.  Don’t forget that  COBRA is a short term solution that only lasts 18 months. Be aware of your longer term options to ensure you have the best coverage available at the best possible price.

Q: I’ve read about the Cobra Extension and heard about it on the news, but I haven’t heard anything from my benefits administrator. Will someone contact me to confirm that I’m still eligible?

A: Under the bill, your former employer is required to inform you of your eligibility. If believe you are eligible and have not heard from your benefit’s administrator we suggest you contact them to verify your eligibility.

Q: When my subsidy expired in November, I couldn’t afford the adjusted rate so I cancelled my COBRA coverage. Can I re-enroll now that the subsidy has been renewed?

A: Yes.  If you reached the end of the subsidy period before the bill passed extending it to 15 months, you’ll have an extended grace period to pay your past due premiums. Check with plan’s benefits administrator for instructions on how to re-enroll.  If you decide to continue your coverage, you’ll be required to pay 35 percent of the past due premium costs within 30 days after you’ve been notified of the subsidy’s extension, or before February 17, 2010.

Q: What are my other options besides depending on another cobra extension?

A: It’s important to do your homework and know all of your available options.  There are many reputible free quote services that will quickly and easily analyze your individual situation and suggest your best coverage options.  We suggest

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Additional Resources:

1. Don’t Wait until it’s too late! Find out your long-term alternatives to COBRA by researching your health insurance options at Health Quote Insider.
2. If this is the first time you are ever considering purchasing your own health insurance, get help by contacting an agent or broker or by using free online resources at BestQuotesOnline.com.
3. If you have a pre-existing medical condition, talk to a licensed agent or contact the Foundation for Health Coverage Education to determine what free and low-cost health care options are available to you in your area.
4. If you have medical debt or need help understanding your rights, we encourage you to look into your debt settlement options. For a free debt settlement consultation click here.

In Late December 2009 Congress passed a bill that President Obama signed which included a provision to extend a government subsidy that will help unemployed Americans continue their health insurance coverage.

Last February, Congress established the subsidy under COBRA (the Consolidated Omnibus Budget Reconciliation Act).

COBRA enables those who have lost their jobs to receive the health coverage at their former employer’s group rates. Although they get can still access this group rate, they have to take on the responsibility of paying the full premium , including the portion that the employer formerly contributed plus a 2 percent administrative fee. The inherent problem with this option is that few who become unemployed can afford the premium, which can consume up to 83 percent of their entire unemployment income.

In March 2009, unemployed workers first became eligible for a subsidy where they pay 35% of the COBRA premium, and employers pay the remaining 65%. The amount paid by the employer is then reimbursed through a payroll tax credit by the government.

Initially the subsidy was only to last nine months, and the first group of eligible Americans were cut off at the end of November. Many others who were due to lose the subsidy at the end of the year were facing the difficult situation of unaffordable monthly health insurance payments.

The COBRA subsidy program extension included in the 2010 Department of Defense Appropriations Act will do the following:

• Extend the amount of time people can receive the subsidy from 9 months to 15 months.

• Extend the  the COBRA premium reduction eligibility period for an additional 2 months. Before the extension, you qualified only if you had lost your job between Sept. 1, 2008, and Dec. 31, 2009. That period of eligibility has no been extended to Sept 1, 2008 to February 28th 2010.

• Give a credit against future payments to people who paid the full premium in December 2009 before the extension was signed. Assistant secretary of labor, Phyllis C. Borzi, suggests that individuals should contact their plan administrator or employer sponsoring the plan to discuss the availability of such a credit.  The bill states that people who were receiving assistance but whose eligibility has expired will be reimbursed, and they will have the option to re-enroll.

• Require employers to send out notices to laid off workers informing them of the most recent changes in the COBRA subsidy.

COBRA enrollment approximately doubled after the subsidy first passed.  The cost of maintaining the average policy with the subsidy is $398 per month for a family and $144 for an individual. Without the subsidy, that cost increases to an average of $1,137 per month for family coverage and $410 per month for individual coverage.

The COBRA subsidy is not available to those who’s former companies have gone out of business or went bankrupt and discontinued their group health plan.