February 17th, 2009

The federal law known as COBRA is a provision that allows recently laid-off workers to continue their health coverage from their former employer’s plan for a certain period of time.  However, COBRA proves to be too expensive for many, because the workers must pay for the full cost of their coverage, which can more than a thousand dollars a month.

The new federal stimulus bill, however, expected to be signed today, includes $25 billion to subsidize 65% of COBRA payments owed by laid-off workers.

Reports the Philadelphia Inquirer:

“…only 9 percent of Americans eligible for COBRA actually use it, according to a recent study by the Commonwealth Fund.

It’s too expensive.

…

The stimulus bill states that the new COBRA subsidy will “help 7 million people maintain their health insurance.”

Read the Inquirer’s in-depth story about the new COBRA provision.