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COBRA Subsidy Extended for Involuntary Terminated Employees

Employees who lose group health insurance coverage prior to May 31, 2010 because of an involuntary termination are eligible to receive the 65% federal government subsidy for the COBRA insurance payments. Under the Continuing Extension Act of 2010, the federal government will pay 65% of an employees COBRA payment. Thumbnail image for Thumbnail image for above-the-bar-logo-no12.jpgThis COBRA subsidy has enabled many former employees to remain covered under their existing health insurance plans. Without this subsidy many more American workers would be uninsured. For example, a family of four may have a COBRA payment of $1,200 per month which would prove to be far too expensive; however, under the subsidy the family could continue coverage at $300 per month for specific time period. This subsidy has proved to the be difference in whether families and individuals are covered in these turbulent economic times. The maximum duration of the COBRA subsidy is 15 months. Employers must notify those individuals who are eligible for COBRA continuation coverage that they may be eligible for a COBRA subsidy. This notice must be given within a 60-day period beginning on the date of the involuntary termination of employment. Employees should follow-up with Human Resources to confirm that they receive the COBRA subsidy. If an employer fails to timely notify an employee of the COBRA subsidy and the employee does not elect coverage because of the prohibitive cost and then later incurs significant medical bills, the former employer could responsible for the former employee’s medical bills for its error. Employers must be careful in providing notice to its former employees. To help employers and employees, the United States Department of Labor recently issued updated COBRA model notices.

If you, your friends or loved ones have any questions about your health coverage or the COBRA continuation subsidy, the experienced Employment Law Attorneys at Villanueva & Sanchala can help you. Call us now at (800) 893-9645 for a free initial telephone consultation.

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