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Q:  Hello, I have been laid off since June 2008, and would like to take advantage of the new cobra plan. I've contacted my old employer, who had all the paperwork ready to put in the mail to me. I then had to call Cobra, to be reinstated. They told me that I had to be laid off Sept. of 2008 or after, not June of 2008. This just does not make any sense to me.. Please clarify.

A:  The American Recovery and Reinvestment Act of 2009 (also know as the federal stimulus package) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.

The premium reduction for COBRA continuation coverage is available to "assistance eligible individuals".

An "assistance eligible individual" is the employee or a member of his/her family who:

·        is eligible for COBRA continuation coverage at any time between September 1, 2008 and December 31, 2009;

·        elects COBRA coverage; and

·        is eligible for COBRA as a result of the employee's involuntary termination between September 1, 2008 and 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. There is no premium reduction for premiums paid for periods of coverage prior to February 17, 2009.

If an individual’s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $145,000 (or $290,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid. 

If you do not meet the above criteria or need help finding affordable health care, feel free to contact one of our Cobra Experts for insurance advice.  To view a more affordable Alternative option please CLICK HERE to get your free quote!