Analysis Shows Federal COBRA Subsidy Has Led to Greater Enrollment
A federal subsidy designed to make health insurance more affordable for laid-off workers has resulted in more workers enrolling in COBRA, according to an analysis by the human resources consulting firm Hewitt Associates, USA Today reports.
COBRA allows laid-off workers to retain their former employer's health coverage for up to 18 months. In the past, laid-off workers could continue to receive employer-sponsored health coverage if they paid the entire premium, plus a 2% administrative fee.
The economic stimulus law provides a subsidy for 65% of COBRA premiums for workers who are laid off between Sept. 1, 2008, and the end of 2009. According to the Kaiser Family Foundation, this allows the average family to continue COBRA coverage for $377 per month, compared with more than $1,000 per month without the subsidy.
The Hewitt analysis found that monthly enrollment rates for eligible workers averaged 38% from March through June of this year, compared with 19% in September 2008 through February 2009. The analysis was based on enrollment rates at 200 large U.S. companies with eight million employees.
Karen Frost, Hewitt's health and welfare outsourcing leader, said that employers "should expect and prepare for COBRA enrollments to remain at their inflated levels" if the unemployment rate continues to rise, "particularly since the subsidy is available to those workers laid off through the end of 2009" (Block, USA Today, 8/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.