With so many job losses out there, I thought I would be sure that folks realize that there is a new structure in the COBRA health insurance program.

As part of Obama’s spending package, your ex-employer must pay for 65% of the insurance cost – for up to 9 months. This appears to be retroactive to September 2008 layoffs. (Assuming you qualify for COBRA)

In my case, I’m paying $1,100./month for full coverage under COBRA now. My ex-employer will have to retroactively pay for 65% of that total, dropping my part down to $385. - and $715. from them.
If you get (or got) terminated, this may be a way to afford health insurance for awhile.

I can’t help but shudder when I think of how much this is going to cost all of the employers who thought that they were lowering their overhead to stay alive. I can't even fathom the total cost. Sure, some can afford it – but it will be the final straw for others – causing even more job losses. The spiral continues........

Marc

I agree.  This could be yet another straw.
When times are tough, you don't go taxing or raising costs for businesses.  Due to this additional liability the employers have, they will probably let more people go.

Lots and lots of employers only cover the employee.  If an employee wants to cover additional family, they must pay for it themselves.  If the employer must cover 65% of the COBRA cost, the liability could be even bigger for the company.

Update:

Further investigation shows that the employer will get a tax credit in some form or other for their involvement. So as long as they are making enough profit to pay taxes, they will get some credit.

So at least part of it will come from taxpayers. I thank all of you folks who are working for picking up the $700. for me!

The main reason for this post was to let struggling people know about this program. If you, or someone you know was downsized from a company with 250+ employees, you need to look into this.

Good info....seems like a lot of people have been bit by the downsizing bug this year...ouch. :'(

Joe

That's nice for people who will need it, but I'm fearful of the effects of forcing this.  Who is ultimately going to pay for it?  All this forced insurance payment, raising of corporate taxes, increased use fees, cheaper/free healthcare for more people, etc., etc., etc. will only raise the cost of living for every American.  Companies don't absorb thses costs.  They get passed along to the consumer in one way or another, and in some cases it causes more companies to move overseas or go out of business creating more unemployment only adding fuel to this fire and the cycle doesn't end.

You guys keep it up and you're gonna scare me into rescinding the retirement papers I filed a few weeks ago.





NOT!

January unemployment statewide 11.6% with the auto industry yet to bottom.

Having been somewhat on the leading edge of this downspin and already going through the limit 18 months paying COBRA, things can get mighty tight, worrisome without.   Don't know how the compromise will work out overall between the growing immediate needs boiling down and consequent future changes.  I don't have family or children, it could have been unimaginatively worse.  Good info, Marc.  

Marc wrote on Mar 6^th, 2009 at 1:03pm:

Update: I thank all of you folks who are working for picking up the $700. for me!

You know, I'm glad I can help out a laid off person with my tax dollars for medical while they are looking for another job. Hopefully, they can find one before the COBRA runs out.

Lisa will be graduating in May and will have to go off my insurance and onto COBRA. My employer told me she can stay for 3 years and the payment will be about $500/mos. How does this change effect kids coming off their parents insurance? They didn't lose a job, just reached the age limits. Hopefully Lisa will find a teaching job this fall but in the meantime this is her only option.

Charlotte