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Q:  I've been working for the same company since 2001 full time. In Jan. 09 they cut my hours to 30 from 40. Now they just informed me that as of 12/1 I will be considered part time and must pay for 35% of my health insurance under cobra. They said this will last until Aug. 1 and then I have to pay the full amount. Is this true? If so, how long does that last?

A:  When you lost your benefits, you can continue them on Cobra.  It’s a continuation of the exact same insurance you had when you were working.  It sounds like when they say you pay 35% you are receiving the reduction.  The reduction lasts for 9 months and you can keep continuing Cobra up to 18 so after you 9 months of reduction you can still be covered for an addition 9 but you will be paying for all of it on your own.

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 $125,000 (or $250,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid.

We are a provider of Cobra information and Alternative Solutions.   We are not affiliated with Cobra.  If you would like a free quote on what we have to offer feel free to CLICK HERE or you may contact me directly with any future questions you may have.