The American Recovery and Reinvestment Act, I’m sorry what’s that…?! I am still coming acroos SOOOO many people who have no idea about what I am talking about when I mention this assistance program that was passed in September of 2008 and will only be available through the end of this year! I feel like I am marketing a sale at Macy’s – but no, I am not marketing anything except the hope that the many people effected by the steady rate of unemployment will utilize this assistance program that pays 65% of your Cobra Premiums for the first 9 months of your coverage. YOU HAVE A 3 MONTH WINDOW to advise your insurance carrier – not your employer – that you want to apply for this assistance program. There is no income level you need to be at in order to be eligible – if you were laid off you will be eligible – but keep reading for further details. Below you will find a synopsis of the American Recovery and Reinvestment Act a program in which amongst other things, provides much needed assistance to those who have recently lost their employer sponsored health insurance coverage by subsidizing 65% of their insurance premiums for 9 months.
In a nutshell, an individual who is terminated from their employment and is eligible for COBRA is subsequently eligible for premium assistance for themselves and their family. Of course there are stipulations in the bill conveying tax ramifications, but I will not get into all of that, instead I will only say that before electing this coverage and earn more than $125,000 you’ll probably want to read the section titled Recapture of Subsidy for High Income Individuals.
I foresee one problem, people will not be aware that this coverage is available although it clearly states in the bill the persons who are in charge of solely that function. That is, educating employers, the public, etc that this premium assistance is available and in Florida also available to groups of less than 20 employees. However, this premium assistance for Cobra benefits needs to be elected by the individual. I come across MANY people who aren’t even aware of their eligibility or rights with regards to health law.
This bill will be effective from September 1, 2008 through December 31, 2009 and the employee has 90 days to elect this assistance by notifying the group health plan in writing…so all we need now is to let people know what COBRA is, let them know if they are eligible, let them know that this assistance program is available and that they have 90 days to elect it – what’s that, ‘you were laid off 4 months ago’..oh no, that’s awful, but true. I’m sure if I kept reading through those 400 pages I would’ve found something on retroactive coverage. But you see my point, ok..assuming this is brand new, ok great, you were just laid off – you have 90 days to notify the group health plan in writing that you want to elect this assistance. Fast forward, 4 months later they thought it magically happened or they procrastinated for too long or they didn’t feel like writing a letter or couldn’t find the address where they were supposed to mail it to…
For those who have lapsed in coverage and are looking for cost effective coverage compare quotes and apply online for a health insurance plan today.
View the entire bill for this act, the American Recovery and Reinvestment Act
You can also access that bill along with other pertinent information with respect to COBRA and this particular Act
Here’s an excerpt from the 407 page document that I thought was particularly pertinent for our purposes.
TITLE III—PREMIUM ASSISTANCE FOR
SEC. 3001. PREMIUM ASSISTANCE FOR COBRA BENEFITS.
(a) PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE
FOR INDIVIDUALS AND THEIR FAMILIES.—
(1) PROVISION OF PREMIUM ASSISTANCE.—
(A) REDUCTION OF PREMIUMS PAYABLE.—In the case
of any premium for a period of coverage beginning on
or after the date of the enactment of this Act for COBRA
continuation coverage with respect to any assistance
eligible individual, such individual shall be treated for purposes
of any COBRA continuation provision as having paid
the amount of such premium if such individual pays (or
a person other than such individual’s employer pays on
behalf of such individual) 35 percent of the amount of
such premium (as determined without regard to this subsection).
(B) PLAN ENROLLMENT OPTION.—
(i) IN GENERAL.—Notwithstanding the COBRA
continuation provisions, an assistance eligible individual
may, not later than 90 days after the date
of notice of the plan enrollment option
(2) LIMITATION OF PERIOD OF PREMIUM ASSISTANCE.—
(A) IN GENERAL.—Paragraph (1)(A) shall not apply with
respect to any assistance eligible individual for months
of coverage beginning on or after the earlier of—
(i) the first date that such individual is eligible
for coverage under any other group health plan
(ii) the earliest of—(I) the date which is 9 months after the first
day of the first month that paragraph (1)(A)
applies with respect to such individual,
(II) the date following the expiration of the
maximum period of continuation coverage required
under the applicable COBRA continuation coverage
(III) the date following the expiration of the
period of continuation coverage allowed under
(C) NOTIFICATION REQUIREMENT.—An assistance
eligible individual shall notify in writing the group health
plan with respect to which paragraph (1)(A) applies if such
paragraph ceases to apply by reason of subparagraph (A)(i).
Such notice shall be provided to the group health plan
in such time and manner as may be specified by the Secretary
(3) ASSISTANCE ELIGIBLE INDIVIDUAL.—For purposes of this
section, the term ‘‘assistance eligible individual’’ means any
qualified beneficiary if—
(A) at any time during the period that begins with
<strong>September 1, 2008, and ends with December 31, 2009,</strong>
such qualified beneficiary is eligible for COBRA continuation
(B) such qualified beneficiary elects such coverage, and
(C) the qualifying event with respect to the COBRA
continuation coverage consists of the involuntary termination
of the covered employee’s employment and occurred
during such period.
(b) ELIMINATION OF PREMIUM SUBSIDY FOR HIGH-INCOME
(1) RECAPTURE OF SUBSIDY FOR HIGH-INCOME INDIVIDUALS.—
(A) premium assistance is provided under this section
with respect to any COBRA continuation coverage which
covers the taxpayer, the taxpayer’s spouse, or any
dependent (within the meaning of section 152 of the
Internal Revenue Code of 1986, determined without regard
to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of the
taxpayer during any portion of the taxable year, and
(B) the taxpayer’s modified adjusted gross income for
such taxable year exceeds $125,000 ($250,000 in the case
of a joint return),then the tax imposed by chapter 1 of such Code with respect
to the taxpayer for such taxable year shall be increased by
the amount of such assistance
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