COBRA Subsidy Comes to an End

Remember the COBRA subsidy? As originally passed (it was part of the American Recovery and Reinvestment Act of 2009, otherwise known as the stimulus package), it picked up 65% of the cost of COBRA premiums for those who lost their jobs from September 1, 2008, through December 31, 2009. Although the original subsidy lasted for nine months, Congress later increased it to 15 months. Congress also extended the subsidy several times, ultimately through the end of May, 2010. Those who lost their jobs and opted for COBRA coverage through May 31, 2010, were eligible for the subsidy; those who lost their jobs later were not.

Counting forward 15 months from May 31, 2010 puts us at the end August 2011 — just about a week from now. That’s when the last lucky recipients of the COBRA subsidy will start having to pay their full premiums, without a subsidy. In other words, their premiums will almost triple for their remaining months of COBRA coverage. And, while anything’s always possible, the current climate of cost cutting and deficit reduction certainly seems to rule out Congressional action to renew the subsidy program.