Getting US Stimulus Aid For COBRA Health Insurance Premiums

What is COBRA?

COBRA laws extend group health insurance benefits for terminated employees. Not all workers will have COBRA protection. Very small companies do not fall under the law, and of course, only workers who had group health insurance at their workplace when they were employed would benefit.

The current COBRA extension period is 18 months. A company that extended benefits because of the COBRA laws did not have to keep contributing towards the premium. Since an average family group health insurance plan averaged over $1,000 a month, once the company contribution stopped, this price kept many terminated employees from taking advantage of the extension.

The US Stimulus plan helps some people keep their health insurance

It pays 65% of the premium, leaving the ex-worker with the remaining 35%. If you have questions about COBRA payment assistance, you should contact your former employer, and not a government office.

The company will make the 65% payments, and then get reimbursed by the federal government. So the terminated workers should only have to pay the remaining 35% of the bill.

Given an estimated $1,000 a month premium, this would reduce the unemployed person’s bill to $350. That may make it possible for many more people to keep their group health insurance benefits.

Terminated workers who declined COBRA will get a second chance to take advantage of this benefit. The lower premium may be an incentive for more people to sign up.

Note that the current stimulus aid lasts for 9 months, while COBRA extensions last 18 months.

Will The Stimulus Plan Help Everybody?

Obviously, the plan will only help people who qualify for COBRA benefits. If the company does not offer a COBRA extension, or if the worker never had group health insurance, they will not benefit. But the plan should help many more families keep their group health insurance until they can find employment.

Alternatives to COBRA

Many families should do everything they can to keep their group health insurance benefits. People with health conditions or families who anticipate a pregnancy will probably be better served with a company plan.

Others may find much more affordable rates on the individual health insurance market. Since private health insurers can individually underwrite each applicant they accept, they can also offer preferred rates to low risk people.

People with lower incomes, little savings, or health concerns may also look into county, state, or federal health programs.

• The Children’s Insurance Program (CHIPS) covers children of families with moderate incomes, and sometimes, covers pregnant women.
• County health systems provide medical care with fees scaled to income.
• Medicaid provides health insurance to people with low income and few assets.
• Each state runs a high risk program for people with pre-existing health conditions, though in some states, it costs quite a bit. These programs are not targeted at low income people, but at those who cannot get accepted for private health insurance, and who lack group coverage.

Health Insurance Plans Are Local

Your own options will depend upon where you live, how much money you have, and your general health. A qualified health insurance agent, in your local area, should be able to explain your options. You can find and compare health insurance plans, and find agents, with a free online health insurance quote form.

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