Laid off? Government will help pay your insurance

If your health insurance vanished when you lost your job, you have a chance to renew your coverage now and the federal government will pick up nearly two-thirds of the tab.

The economic stimulus package includes $24.7 billion for health-insurance premiums under the COBRA program, which allows laid-off workers to keep their company's health insurance if they pay the full monthly premium. The stimulus money will pay 65 percent of the premiums for nine months if the workers pay the other 35 percent.

The subsidy became available Feb. 17, but employers had 60 days to notify former workers of the new opportunity. Notification letters were to have been sent by April 17, and those who are eligible have 60 days from the date they received the letter to choose to enroll.

Jackson County Commissioner Dave Gilmour, a physician, said he was concerned some people would ignore the letter and miss a chance to restore their health insurance.

"It's such a critical thing," Gilmour said. "I'm worried people will miss the time to do this."

The goal of the program is to re-enroll people in the insurance program they had before losing employment, said Cheryl Martinis, a spokeswoman for the Oregon Insurance Division. Unfortunately, "there are a lot of complicated rules," she said.

First there's the COBRA program itself, with a name that comes from the law that created it — the Consolidated Omnibus Budget Reconciliation Act of 1985. The original law allows workers to retain their employer's insurance coverage for 18 months, but they have to pay the full premium. The law covers employers with at least 20 workers.

The stimulus act, formally known as the American Recovery and Reinvestment Act, provides 65 percent of the COBRA monthly premium for nine months for workers who lost employment since Sept. 1, 2008 or through Dec. 31, 2009.

Not everyone who has been laid off is necessarily eligible. Workers whose employers did not offer health insurance can't participate, nor are those whose employer has shut down completely, or anyone who lost work prior to Sept. 1, 2008.

Martinis said employers with fewer than 20 workers are covered by Oregon's insurance continuation program, which formerly provided six months of extended insurance benefits, but that's about to change.

The Legislature has been working on a bill that would make Oregon insurance benefits consistent with the federal subsidy. On Wednesday, the Senate passed the measure, which requires insurers to notify all employer groups and individuals whose jobs end or ended between Sept. 1, 2008 and Dec. 31, 2009 of their eligibility. The measure previously passed the House and now awaits the governor's signature.

Even with the 65 percent federal subsidy, the sheer cost of health insurance may prevent some people from reinstating their insurance.

Data from the Kaiser Family Foundation collected in 2006 put the average annual cost of insurance in Oregon for one person at $4,100 ($342 monthly). Insurance for a laid-off worker plus one person was $8,764 ($730 monthly). Family coverage cost $11,600 ($967 monthly).

Using those figures and deducting the 65 percent federal payment, a laid-off worker's share would be around $120 per month for single coverage; $256 for employee-plus-one coverage; and $338 for family coverage.

Oregon's average unemployment check was $311 per week in early April, according to state Employment Division data. Each worker's actual benefit is calculated on a percentage of actual earnings during the 12 months prior to job loss. The maximum benefit is $482 per week; the minimum, $113.

"Some may still not be able to afford it," Gilmour, the county commissioner, said.

The subsidy diminishes as income increases, but the full 65 percent subsidy is available to individuals with an income up to $125,000 and married couples with an income up to $250,000.

State officials will be distributing information about the new state subsidy after the governor signs the bill.

"We've just been waiting for the state bill to pass," she said, "so we could know what to tell people."

Reach reporter Bill Kettler at 776-4492 or

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