Under the Bill, 7 Million Terminated Workers and Their Families Will Receive Easier Access to Affordable, Quality Health Care

WASHINGTON - Today, Congressman Paul E. Kanjorski (D-PA) provided details for how the recovery package will provide a 65 percent reduction in COBRA premiums for people who lose their jobs between September 1, 2008 and December 31, 2009.  This provision in the bill will allow 7 million involuntarily terminated workers and their families to continue to afford quality health care despite the troubling economic situation forcing many people out of their jobs.  This premium reduction will last for up to 9 months

"During these difficult economic times, too many people are losing their jobs, but that does not mean that they and their families should lose vital health coverage," said Congressman Kanjorski.  "The recovery package is helping to ensure that despite people's work situations, they and their families can access quality health care at a reduced, more affordable rate.  While it is extremely regrettable that many people are forced out of their jobs from the economic crisis, the added cost of health care could devastate many families.  This provision aims to lessen that burden."

Workers and their families apply for the COBRA reduction if the following applies:

• They were involuntarily terminated between September 1, 2008 through December 31, 2009.
• They have a modified adjusted gross income in 2009 and/or 2010 that does not exceed $125,000 for individuals or $250,000 for families. 

Individuals and families are not able to receive the COBRA reduction if they are eligible for other group health coverage, such as through a spouse's health care plan, or for Medicare.

As of February 17, 2009, when the recovery package was enacted, terminated workers are only required to pay 35 percent of their total premiums.  They should immediately contact their former employer or insurer that administers their COBRA to obtain the documents necessary to establish eligibility for the premium reduction.  If workers have already paid the full amount for the next pay period, their former employer or insurer is required to reimburse them or credit a future payment.

Workers involuntarily terminated from their jobs between September 1, 2008 and February 16, 2009, and who either did not initially elect COBRA or dropped their COBRA coverage, will have a second chance to elect COBRA.  These workers should receive notification from their former health providers by April 18, 2009.  They will then have 60 days after they receive the notice to apply for the premium reduction.  Workers can also contact their former employers to say that they would like to take advantage of the second COBRA election period.  If the worker receives the COBRA premium reduction, their coverage starts with the first period of coverage beginning on or after February 17, 2009.

Please click here or here to learn more details about the COBRA cost reduction from the recovery package, or contact the U.S. Department of Labor's Employee Benefits Security Administration's Benefits Advisors at 1-866-444-3272.

###