Even prior to the most recent medical insurance legislation, congress has been trying to help out people who may be laid off or unemployed to have medical insurance. The February 2009 American Recovery and Reinvestment Act was designed to help with the overall financial crisis in the United States. One of the ways that it did so was to help with insurance.

Help from the American Recovery and Reinvestment Act

Specifically, under the Act, people that had lost their jobs and were eligible to sign up for COBRA would receive help in paying the premiums for their COBRA medical insurance coverage. The money from the federal government would cover 65 percent of the cost of the worker’s monthly COBRA premiums. This was effective for people who became laid off between September 2008 and December of 2009.

A Program Extended

This program has been extended by Congress a number of times since the original bill passed. Most recently, it was extended on April 15. On that day, the President signed legislation that would not only extend the unemployment benefits that many workers have been receiving, but also provide additional help for COBRA premiums.

Specifically, this legislation extended the COBRA premium subsidy for people that are involuntarily terminated from their jobs all the way up through May 31 of this year.

There is talk, however, that Congress may continue to extend these benefits. It’s suspected that the benefit may continue all the way through the end of the year.

Understanding How COBRA Works

It’s important to understand how COBRA works. If a company has more than 20 employees and offers medical insurance, they are required by federal law to allow you to continue to participate in their group insurance program for a minimum of 18 months after you leave the company.

If that happens, you have to pay for the premium costs yourself. That is likely going to be as much as $400 for an individual, or more than $1,000 for a family. In fact, the average cost for a family was $1,111 in 2009. The federal subsidy reduces the cost of that premium to $389. This still makes it a challenge to pay for COBRA, but it is much easier than it was before the federal assistance was passed.

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