The Gift of Health Insurance

The Gift of Health Insurance

Yesterday morning, on Christmas Eve, the Senate passed its version of the Patient Protection and Affordable Care Act.  Whether the law will be good in the short or long term is now unknown, but it will allow many more people to obtain health insurance who were otherwise considered uninsurable.

And earlier this week, on December 21, the President signed a law extending the COBRA subsidy.  The subsidy is available for a maximum of 15 months.  As discussed here a few months ago, the COBRA subsidy reduces the premium for the terminated individual to 35% of the full freight; the employer pays the remaining 65%, but receives a dollar-for-dollar credit against withholding taxes, so it’s really just an advance.  Employees who were eligible for the original COBRA subsidy can extend their coverage at the reduced cost through February.  (These were employees involuntarily terminated between September 1, 2008, and December 31, 2009; now the termination cutoff date is extended through February.)  Employees who dropped the coverage as too expensive will be given the option to rejoin the plan.

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