The recently signed American Recovery and Reinvestment Act of 2009 includes a provision that may help some recently unemployed clients keep their health insurance.
The new law provide for a 65% reduction in the cost of health insurance premiums for nine months for people eligible for COBRA benefits between Sept. 1, 2008, and Dec. 31, 2009, with the 65% assistance starting when the law was signed Feb. 17. Those who are eligible for other group health coverage (such as a spouse's plan) or Medicare are not eligible for the premium reduction.
Those who are involuntarily terminated through no fault of their own can usually continue to purchase their health insurance from their employers at the group rate through the COBRA provision. Even so, the price of health insurance is often prohibitively expensive, especially for families. For many, it would take their entire unemployment check and more to continue coverage for themselves and their families, says the Families USA Foundation. On average, it takes nearly 84% of unemployment income to cover COBRA premiums for family coverage. Average monthly unemployment income nationwide is $1,278, while average monthly COBRA premiums for a family are $1,069, the foundation says.
Applications for the premium reduction should be made through the former employer's group health plan. The U.S. Department of Labor is currently developing an appeals process for those who feel they are unfairly denied assistance. Additional and new information will be posted on the department's Employee Benefits Security Administration Web site.