Office of the Vice President for Global Communications

Tuesday, September 8, 2009

Record Update First

Some unemployed can get federal COBRA subsidies

Amid mounting stress for the nation’s unemployed, the federal stimulus program provides reduced premiums for those receiving health care benefits under the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA.

The U-M Benefits Office will send notices to the homes of affected faculty and staff with details of the requirements for assistance.

“The American Recovery and Reinvestment Act (ARRA) provides a 65 percent subsidy for the cost of health benefits, making them more affordable for the unemployed and their families,” U.S. Secretary of Labor Hilda Solis said in a statement. “Millions of individuals, including those who previously declined employer-provided coverage under COBRA, will be eligible to receive a subsidy on their premiums for up to nine months.”

COBRA gives workers who lose their health benefits because of losing their jobs the right to purchase continued group health coverage in certain circumstances. Under ARRA, individuals will pay 35 percent of their COBRA premiums. The employer covers the difference and is reimbursed by the federal government.

Faculty and staff who receive the premium reduction must qualify as “assistance eligible individuals.” To meet the federal requirements for eligibility, the individual must be the employee or a member of his/her family who:

• Is eligible for COBRA continuation coverage at any time between Sept. 1, 2008, and Dec. 31, 2009;

• Elects COBRA coverage; and

• Is eligible for COBRA as a result of the employee’s involuntary termination of employment between Sept. 1, 2008, and Dec. 31, 2009.

Those who are eligible for other group health coverage, such a spouse’s health plan or Medicare, are not eligible for this program.

For more information about COBRA premium reductions, go to the Benefits Office Web site at www.umich.edu/~benefits. Detailed information on eligibility for COBRA and ARRA’s premium reduction requirements is available from the U.S. Department of Labor at www.dol.gov/COBRA.