Rep. Courtney Releases COBRA Premium Reduction Information to Assist Unemployed

Press Release

Rep. Courtney Releases COBRA Premium Reduction Information to Assist Unemployed

Expanded health benefits and premium reductions for the unemployed result of ARRA

For the recently unemployed, health care costs are a major concern and today Congressman Courtney has released new information about the premium subsidy for the COBRA health insurance program to assist individuals and families during these uncertain economic times.

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65% reduction in COBRA premiums for certain assistance eligible individuals for up to 9 months.

"There has been a rising tide of phone calls and letters to my office from concerned constituents who have been laid off because of the downturn of the economy and I want them to know that I will continue to help in any way that I can," stated Courtney. "It is important that families know that while we can't perform miracles, we can offer important information and critical direction."

Eligibility

An assistance eligible individual is a COBRA "qualified beneficiary" who meets all of the following requirements:

* Is eligible for COBRA continuation coverage at any time during the period beginning September 1, 2008 and ending December 31, 2009;
* Elects COBRA coverage (when first offered or during the additional election period), and
* Has a qualifying event for COBRA coverage that is the employee's involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.
* Those who are eligible for other group health coverage (such as a spouse's plan) or Medicare are not eligible for the premium reduction. Other limitations may also apply.
* There is no premium reduction for periods of coverage that began prior to February 17, 2009.

How it works

If the employer is already up to date, they may only require the employee to pay 35% of their premium for the upcoming month. Otherwise, the subsidy eligible employee must pay their COBRA in full and the employer is obligated to refund the money.

The employer is reimbursed for the subsidy through a deduction in the payroll tax withholding. The IRS has laid out guidelines for an employer to report their COBRA premium assistance payments.

Individuals who request treatment as an assistance eligible individual and are denied such treatment by their group health plan may have the right to an expedited appeal to the Department. The Department is currently developing a process and an official application form that will be required to be completed for appeals.

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