Subsidy Boosts COBRA Enrollments

December 23, 2009 ( - A new analysis from Hewitt Associates indicates that average monthly enrollment rates in COBRA health care plans among subsidy-eligible employees have increased by 20 percentage points since the subsidy was enacted.

Hewitt’s analysis examined the COBRA enrollment activity for 200 large U.S. companies representing eight million employees from March 2009 to November 2009, and found monthly COBRA enrollment rates for subsidy-eligible employees averaged 39%, compared to 19% for the period of September 2008 to February 2009, according to a news release.

 In the industrial manufacturing industry, the average monthly COBRA enrollment rate for eligible employees rose from 7% (September 2008 to February 2009) to 67% (March 2009 to November 2009), and in the media industry the rate went from 13% pre-subsidy to 36% after the subsidy was enacted. In addition, companies in the aerospace and defense industry saw the rate of COBRA enrollments more than double, from 30% (September 2008 to February 2009) to 63% (March 2009 to November 2009), the news release said.

Financial Services saw an average monthly enrollment rate of 27% prior to the subsidy and 34% after.

An earlier Hewitt analysis of COBRA enrollments through June 2009 found enrollments doubled from the time the subsidy was enacted (see COBRA Enrollments Doubled Since Subsidy Enacted).

Under the COBRA subsidy provision of the American Recovery and Reinvestment Act of 2009, workers involuntarily terminated between September 1, 2008 and December 31, 2009, receive a nine-month subsidy of 65% of the COBRA premium. On Monday, President Obama signed legislation that increases the subsidy period to 15 months and extends eligibility for the subsidy to workers who are displaced prior to February 28, 2010 (see COBRA Subsidy Extension Passed).