Federal subsidy for COBRA health coverage expires today

WASHINGTON — One of the key consumer benefits of the federal stimulus package — subsidies to help laid-off workers continue their health care coverage — draws to a close today, raising concerns about how the unemployed will cover those expenses.

It's a dilemma that Holly Jespersen knows firsthand. She lost her job twice in the past two years — both times losing her employer-paid health insurance. But the second time, she paid about $350 a month more for insurance than she had the first time because she didn't qualify for the subsidy. "It made a huge difference for me," said Jespersen, 36, of Darien, Conn. "I wish I still had it."

Jespersen was one of millions of laid-off workers to benefit from the federal subsidies for COBRA, a program set up under federal law that allows people who lose their jobs to keep the employer-provided insurance, typically for 18 months, if they pay the entire premium plus a small percentage for an administrative fee.

In February 2009, at the height of the economic downturn, Congress first approved a 65 percent subsidy for COBRA premiums to help those who had been laid off starting in September 2008. While Congress extended the COBRA subsidy three times to cover workers who lost their jobs through May 2010, lawmakers last year resisted another extension amid rising concerns about the federal budget deficit. Because the subsidy lasted for up to 15 months, the last people to take advantage of the savings lose that help starting Thursday.

The subsidy lasted up to 15 months so it expires today. (There is one exception, a Labor Department spokesman said. If workers laid off before May 31, 2010, were allowed by their employers to continue to receive their work-sponsored health coverage, their subsidy eligibility would begin when the company-paid insurance ended, and could extend beyond today.)

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