Cobra stands for Consolidated Omnibus Budget Reconciliation Act of 1985. Among other things, COBRA gives the opportunity for some employees the opportunity to continue their health insurance coverage even after leaving their employment.
Global recession of 2008 and 2009 has led to many job losses. As a result of which only 10% of the Americans eligible for Cobra could afford to pay the full health insurance premium mainly because of their job loss.
In order to help layoff employees, as part of 2009 stimulus package the Obama government has decided to help by reduction of Cobra Health Insurance payment by 65% for 9 months.
- Anyone who lost or loses her/his job (layoff victim) between September 1 2008 and Dec 31 2009 may qualify for the 65% premium reduction of Cobra Health Insurance Payment for 9 month. So if you qualify, you will only have to pay 35% of Cobra premium to your former employee.
- In order to qualify you must have worked for an employer who is required to offer Cobra Health Insurance coverage extension. If you did not enroll in COBRA because it was too expensive or you could not afford it, you still have 60 days ( from Feb 17 2009, i.e. till April 17th 2009) to elect for Cobra and receive the 65% premium reduction subsidy.
- Income Limits / Income Caps: In order to qualify for Cobra Stimulus your modified gross annual income must be less than $150,000 for individual tax payers and $250,000 for married tax payers.
- You are not eligible for the Cobra stimulus if you are eligible for other group health coverage or Medicare.
Other Tax Breaks, Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you