House Passes COBRA Expansion as Part of Stimulus Package

January 29, 2009 (PLANSPONSOR.com) - Legislation approved by the U.S. House of Representatives as part of a stimulus package could require employers to offer COBRA health care coverage for former employees for decades.

Business Insurance reports that the COBRA provisions, embedded in the stimulus package that was approved on a 244-188 vote, would allow employees who stop working as young as age 55 to retain COBRA coverage until becoming eligible for Medicare when they turn 65, regardless of how long they worked for the employer. In addition, any employee who worked at least 10 years for a company could keep COBRA until eligible for Medicare – extending the coverage for more than a decade for younger workers.

The House bill also would provide a 65% federal COBRA premium subsidy for individuals who are laid off between September 1, 2008, and December 31, 2009 (see House Bill Would Expand COBRA Coverage ). Beneficiaries’ premiums would be subsidized up to 12 months.

According to Business Insurance, a bill approved earlier this week by the Senate Finance Committee takes a more limited approach, capping the federal COBRA premium subsidy at nine months, while keeping in place the current 18-month limit on COBRA eligibility for employees terminating employment (see  Congress Pondering Federal COBRA Subisdy ). The full Senate could take up that bill as soon as next week.

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