Obama Administration Proposes another COBRA Subsidy Extension

February 2, 2010 (PLANSPONSOR.com) – The Obama administration has proposed an additional extension of the availability of COBRA premium subsidies for employees involuntarily terminated.

Business Insurance reports that under the latest extension, employees who are laid off from March 1, 2010, through Dec. 31, 2010, would be eligible for the 65% premium subsidy for up to 12 months. The proposal is embedded in the administration’s proposed federal budget for fiscal 2011, according to the news report.

Benefits experts expect lawmakers to be receptive to the extension. “As long as unemployment remains at high levels and access to health insurance coverage remains spotty, the willingness to extend COBRA assistance will remain strong and persistent. It also appeals to members of Congress on both sides of the aisle,” said Frank McArdle, a consultant with Hewitt Associates Inc. in Washington, according to Business Insurance.

Under current law, employees laid off from Sept. 1, 2008, through Feb. 28, 2010, can receive the premium subsidy for up to 15 months (see EBSA Adds COBRA Subsidy Extension Materials).

An analysis from Hewitt Associates indicated that average monthly enrollment rates in COBRA health care plans among subsidy-eligible employees increased by 20 percentage points since the subsidy was enacted (see Subsidy Boosts COBRA Enrollments).