You can now access the text of the proposed American Economic Recovery and Reinvestment Plan. A large portion of the bill with its own separate title–the Health Insurance Assistance for the Unemployed Act of 2009–contains provisions which would greatly impact employers and provide a massive expansion of the current COBRA program. The proposal includes three components pertaining to health insurance for the unemployed:
1. A government-provided COBRA subsidy for those involuntarily terminated from employment. The subsidy provided would be equal to 65 percent of the COBRA continuation premiums for up to 12 months for workers who have been involuntarily terminated (and their families). The subsidy would apparently also apply to health care continuation coverage if required by states for small employers.
2. Medicaid provisions providing states the option of offering coverage to unemployed workers via their Medicaid programs with the federal government matching 100 percent of the costs of the benefits and administration.
3. An extension of COBRA for older and tenured workers. The benefits provided by this portion of the legislation would be separate from the short-term subsidy for involuntarily terminated workers. COBRA-eligible workers who are 55 and older, or have worked for an employer for 10 or more years, would be able to retain COBRA coverage, at their own expense, until they become Medicare eligible at age 65 or secure coverage through a subsequent employer.
Access the Ways and Means summary here. More links here.
Workforce Management in its article here notes:
Currently, only about 20 percent of those eligible for COBRA enroll, a low acceptance due in part to the high cost of coverage. Under law, employers can charge beneficiaries a rate equal to 102 percent of the cost of coverage offered to employees.With a higher take-up rate, employer costs would rise since beneficiaries opting for COBRA on average use more medical services than other health plan enrollees, surveys have found.
House Democrats estimate the subsidy would cost the government a total of $30.3 billion.