INFORMATION
FROM CONGRESSMAN OLVER ON COBRA PREMIUM REDUCTION
**E-Newsletter, March 2009**
Over the past several months, many residents of western
and central Massachusetts have contacted me with their concerns about the
economy, including personal stories of job loss, plunging retirement funds and a
failing housing market. Indeed, times are difficult. In fact,
according to the Bureau of Labor Statistics, last month an additional 651,000
workers lost their jobs, bringing the total to 12.5 million.
As many of you are aware, on February 17, 2009,
President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA)
into law to stimulate the failing economy. While we cannot expect this law
to singularly or immediately “solve” our economic woes, there was a very
important provision in the legislation that I want to draw your attention to –
ARRA expands eligibility for COBRA continuation coverage and provides a
premium reduction to certain qualified individuals.
COBRA (the Consolidated Omnibus Budget
Reconciliation Act of 1985) provides for a temporary extension of
employer-provided group health coverage, commonly called COBRA continuation
coverage. ARRA will provide a 65 percent reduction in COBRA premiums
for people who lose their jobs between September 1, 2008 and December 31, 2009.
This premium reduction will last for up to 9 months.
Workers and their families can apply for the
COBRA reduction if the following applies:
·
They were involuntarily terminated between
September 1, 2008 through December 31, 2009.
·
They have a modified adjusted gross income in
2009 and/or 2010 that does not exceed $125,000 for individuals or $250,000 for
families.
·
They are not eligible for group health
coverage through another source (such as a spouse’s health care plan or
Medicare).
Affected workers should contact their former employer or
insurer that administers their COBRA to obtain the documents necessary to
establish eligibility for the premium reduction. If workers have already
paid the full amount for the next pay period, their former employer or insurer
is required to reimburse them or credit a future payment.
Workers involuntarily terminated from their
jobs between September 1, 2008 and February 16, 2009, and who either did not
initially elect COBRA or dropped their COBRA coverage, will have a second chance
to elect COBRA. These workers should receive notification from their
former health providers by April 18, 2009. They will then have 60 days
after they receive the notice to apply for the premium reduction.
Workers can also contact their former employers
to say that they would like to take advantage of the second COBRA election
period. If the worker receives the COBRA premium reduction, their coverage
starts with the first period of coverage beginning on or after February 17,
2009.
I believe this provision is necessary to help
American families through these difficult economic times. Workers
involuntarily terminated due to the recession need immediate assistance, and
COBRA offers such aid.
For more information, there are a number of resources
available through the Department of Labor:
·
www.dol.gov/cobra *There is a place to sign
up for email updates as new information becomes available concerning the rollout
of this new benefit.
·
1-866-444-3272: U.S. Department of Labor’s
Employee Benefits Security Administration
Sincerely,
John W. Olver
Member of Congress
