No More COBRA Subsidy

Remember the COBRA subsidy passed as part of the stimulus package (known more formally as the American Recovery and Reinvestment Act, or ARRA)? As originally configured, the subsidy picked up 65% of the cost of COBRA premiums for workers who lost their jobs involuntarily between September 1, 2008 and December 31, 2009 and wanted to continue their health insurance.

Although the subsidy originally lasted only nine months, Congress later increased it to 15 months. Congress also extended the subsidy several times, ultimately through the end of May, 2010. Employees who lost their jobs by that date were eligible for the subsidy; those who lost their jobs starting on June 1, 2010 and later were not.

Counting forward 15 months from May 31, 2010 puts us at the end of August, 2011. That's when the lucky last recipients had to start paying their full premiums, without any subsidized assistance. In other words, their cost of continuing health insurance almost tripled. While anything is always possible, the mood in Congress in this election year certainly appears to rule out any further legislation to reinstate the subsidy.