Administration considers extending COBRA premiums

The Obama administration announced Monday that it is considering extending a federal law that subsidizes COBRA health insurance premiums for laid-off workers.

Business Insurance reports: "An economic stimulus law that went into effect early this year includes a provision in which the federal government pays 65% of the COBRA premium for up to nine months for workers who are involuntarily terminated through the end of this year. Without an extension, employees who lost their jobs earlier this year soon will lose the federal COBRA subsidy. The availability of that subsidy resulted in a doubling of the percentage of laid-off employees opting for COBRA, found a Hewitt Associates Inc. survey released in August. ... The rise in COBRA enrollment also means higher costs for employers, though it isn't known yet by exactly how much" (Geisel, 10/5).

Reuters reports that Obama "is still not planning to pursue a second stimulus package but his advisers are considering a range of programs for creating jobs, White House spokesman Robert Gibbs said on Monday. The U.S. Labor Department said on Friday that U.S. employers unexpectedly cut more jobs in September than in August, underscoring the fragility of the economy's recovery from its worst recession in 70 years." The administration is looking at options including "extending unemployment payments and Cobra health insurance benefits for the unemployed and continuing the $8,000 tax credit for first-time home buyers" (Zengerle, 10/5).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.