COBRA - A 65% Discount

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act (the “Act”), which includes several important changes to COBRA.

The Act provides for a federal subsidy of 65 percent of the COBRA continuation coverage premiums for qualified beneficiaries receiving COBRA continuation coverage due to the covered employee’s involuntary termination of employment between September 1, 2008 and December 31, 2009.

Your COBRA office has up to 60 days from the enactment date - which is March 1, 2009 - to notify you of this change.

I spoke with my COBRA administrator and was told that you need to pay your full premium until the COBRA system gets caught up with this new law. Once the system is set up to accept 35% premium payments for COBRA, any over payments will be credited to your COBRA account. If you find a job and cancel COBRA, any over payments will be refunded.

I was also advised NOT to send in only 35% of my COBRA payment because their systems are not set up to accept the reduced amount yet. If you do, your payment will be returned and this can affect your status.

All that said and done...thank goodness. This 65% reduction is a huge help to the unemployed. This deserves a God Bless America.