Congress has passed a bill extending the COBRA subsidy which helps unemployed individuals continue their health insurance coverage. With the enactment of the economic stimulus package, many laid-off workers qualified to receive healthcare coverage assistance through federal COBRA subsidies. The bill extended the number of months covered by the subsidy from nine to fifteen months. Before the extension, the employee or family member qualified if involuntarily terminated from employment between September 1, 2008, and December 31, 2009. That period of eligibility has been extended to February 28, 2010. The subsidy will apply to COBRA payments made on or after February 17, 2009. Employees who are eligible will be required to pay only 35% of their COBRA premium while employers will subsidize the remaining 65%. The annual income of the individual must be less than $125,000 if single or $250,000 if married. Once the employee qualifies for coverage under another group health plan or Medicare, his or her eligibility for this coverage will end.

See Related Alert: Department of Labor Issues New Model COBRA Notices