COBRA enrollments have doubled since the U.S. government enacted a new subsidy to make health insurance more affordable to workers who have been laid off, according to an analysis published in August by Hewitt Associates.
More than 14 million workers are now eligible for the Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA). Hewitt's analysis examined the COBRA enrollment activity for 200 large U.S. companies representing 8 million employees. From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009.
Under the original COBRA legislation, involuntarily terminated workers were required to pay 100 percent of the healthcare premium plus an additional 2 percent to cover administrative costs, which translates to roughly $8,800 a year in COBRA healthcare costs for the average worker. Under ARRA, eligible workers receive a nine-month subsidy that leaves them responsible for paying only 35 percent of the COBRA premium, or about $3,000 a year. The research shows that on average, workers with employer-sponsored health coverage pay 22 percent of the premium cost, or $1,900 a year.
Read the press release from Hewitt Associates.
Read about CMS-sponsored support services for COBRA assistance eligibility denials.
