COBRA Subsidy in Senate-Approved Stimulus Package Version

February 10, 2009 ( - The economic stimulus package passed in the U.S. Senate on Tuesday included government subsidies for health-care premiums for laid-off workers.

A Business Insurance news report said the Senate bill calls for the government to pay 50% of COBRA health care premiums for up to 12 months for employees who are laid off from September 1, 2008, through December 31, 2009 (See Congress Pondering Federal COBRA Subsidy ).

According to the news report, the Senate legislation, among other things, would require employers to locate employees laid off since September 1, 2008, who had declined COBRA to tell them they have a new right to opt for the health care coverage with the government picking up 50% of the premium. Individuals would have two months after receiving a notification from their former employers of their new right to receive subsidized COBRA coverage, with the subsidy being prospective.

Meanwhile, under the competing House version of the federal COBRA premium subsidy provision, the subsidy would be set at 65% and would last for up to 12 months (See  House Passes COBRA Expansion as Part of Stimulus Package ). That measure also would allow employees terminating employment after 10 years with one employer and those age 55 and older to retain COBRA until eligible for Medicare at age 65.