Unemployed workers received a holiday gift of extended subsidies for healthcare benefits–but employers have to front the money and spread the news.
On Dec. 19, President Barack Obama signed a 6-month extension to federal stimulus funding for healthcare subsidies for workers laid off since the economy went into free-fall in mid-2008.
The maximum length of the subsidy was extended from 9 to 15 months, and eligibility was exp
anded to include workers laid off through the end of February. The initial window was for those laid off from Sept. 1, 2008, through Dec. 31, 2009.
The move, indicated as federal backing for the "jobless recovery," is expected to keep thousands of unemployed workers on healthcare insurance rolls for another 6 months, but means cash-flow problems and more paperwork for business owners.
"Employers will need to allow (former) employees who had rolled off the subsidy an opportunity to roll back on for a total of 15 months," said Vinny Catalano, area vice president at Gallagher Benefit Services.
That means tracking the employees and getting them signed up again if they choose, as well as telling newly laid-off workers about the extended time limit. It also could mean money out-of-pocket because employers get reimbursed through tax credits rather than cash for the insurance premiums they have to pay.
Hoping to boost participation and stem the rising number of Americans without health insurance, the federal government kicked off a stimulus funding program that picks up 65 percent of the cost for most laid-off workers and their families. The subsidy shaved the average cost to $398 per month for a family and $144 per month for an individual.
The subsidy cranked up interest considerably.
An informal study by the California Dept. of Managed Health Care in late September found that 13,420 California residents applied for a COBRA subsidy from 7 large HMOs and more than 10,100 were eligible for federal help.
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