These are tough times. Each of us probably know of someone who has lost a job in the current recession. This is important information so please pass it on.
One of the biggest problems when someone losses their job (and can’t find another quickly enough) is loss of health insurance. COBRA is very expensive ($1000+ per month).
In the just passed economic stimulus bill, there is a major change in COBRA. Fed govt will subsidize 65% of COBRA payments for eligible employees. Employer should pay this subsidy and then deduct from payroll taxes. Eligible employee basically means that this subsidy only applies if one is making less than $250k - for married filing jointly. This is a pretty high number so should cover most people.
The only problem is that this is a very new law so most HR departments are still looking into it and trying to find answers. Anyone whose employment has been involuntarily terminated, except for gross misconduct, is eligible for the assistance if the termination took place between Sept. 1, 2008, and Dec. 31, 2009. By the way, COBRA remains available for 18 months but this subsidy is only available for 9 months. Those who lost their jobs after Sept. 1, 2008, and didn’t enroll in COBRA will have another opportunity to sign up for coverage.
For more info in plain english, check out the following links.
TDTNews.com - Temple Daily Telegram
No time to waste on COBRA subsidy - Los Angeles Times