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Most people are aware that President Obama’s stimulus package under the American Recovery and Reinvestment Act of 2009 included a temporary premium reduction, or subsidy, for anyone on COBRA. Individuals eligible for COBRA coverage due to involuntary employment termination occurring September 1, 2008 through December 31, 2009 may be eligible for the subsidy. With this date bracket coming to a close, many people are wondering what will happen to those losing a job in the near future.

The United States Department of Labor has just announced changes for the COBRA subsidy. In order for an individual to be eligible for the subsidy, two events must have occurred on or before December 31, 2009: 1) Involuntary job termination and 2) becoming eligible for COBRA.

An involuntarily terminated employee will not be eligible for the COBRA subsidy, if his or her coverage runs through December 31, 2009. Even if an employee loses his or her job before December 31, if his or her coverage lasts until the end of the month, he or she will not be eligible for COBRA coverage until January 1, 2010.

The Department of Labor has put out Question and Answers on their website which you can find at http://www.dol.gov.ebsa/COBRA.html.

For more information about the original components of the subsidy visit Health Plan One’s COBRA page.

What to do if your COBRA subsidy is ending:

As the subsidy lasts only nine months, it is now ending for many beneficiaries.  If you are a COBRA subsidy recipient, you may not receive notification that your subsidy is ending-you will simply see a huge difference in your next COBRA bill. Refusal to pay this will immediately end coverage. It is important that you do not have a lapse in coverage because health insurance carriers may use this as a reason to deny future coverage for preexisting conditions.

As recommended in the New York Times your best bet is to check for all your options. You can view pricing information from carriers in your area by entering your zip code in our zip code box which will take you to view available individual plans. As always, you can discuss your options with our licensed health insurance specialists, who can recommend what the best plan would be for you.

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