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Thousands of families who took advantage of the federal government subsidy for extending their former employer’s health insurance coverage through COBRA have had to rethink their options in the past few weeks. On June 1, 2010 the federal government’s subsidy of COBRA health plan extensions expired. COBRA is a federal program which allows workers who have been laid off to continue the health insurance benefits their families received through their job after their employment has been terminated. With employer-sponsored coverage, companies contribute a given portion of the cost of their workers’ health insurance premiums and workers pay the rest. When a worker is laid off, COBRA gives that individual the option to remain on the same insurance plan as long as they agree to pay the total cost of monthly premiums themselves. Unfortunately, the full burden of such premiums is often too onerous for unemployed individuals to bear, especially in economic times such as these. That’s why as part of last year’s economic stimulus package, the federal government offered to subsidize the cost of extending one’s old coverage through COBRA at 65%. This subsidy was available beginning March 1, 2009 and offered 15 months of subsidized coverage to those who took advantage of the extension.

According to a study by the Treasury Department up to 1/3 of eligible unemployed workers signed up for the program. Last Tuesday, this benefit expired leaving thousands of families who took advantage of the opportunity to extend their health plan feeling they can no longer afford to continue this coverage without the help of the subsidy.  One exception to the June 1, 2010 expiration date remains for those who did not become unemployed until more recently. Those families who accepted the COBRA subsidized extension after March 1, 2009 but before December 31, 2009 are able to continue COBRA until September 30, 2010 when the subsidy expires completely. These families will be dropped off COBRA on a rolling basis based on when they signed up.

Though Congress has extended the COBRA subsidies four times since February 2009, the most recent proposed subsidy extension failed due to worries on the part of legislators about the federal budget deficit. Some states are offering additional COBRA extensions (called “mini-COBRA” laws) to supplement federal COBRA to extend benefits up to 36 months but again, the cost of these premiums tend to be much higher than those for plans available on the individual market.

Recently we have had many families losing their COBRA coverage visit our website to look into other, less expensive health insurance options offered on the individual and family health insurance market through us at Health Plan One. With individual and family plans, consumers are able to tailor their coverage so they only pay for the benefits which meet their specific needs. If you’re interested in doing your homework on the individual and family plans available to you, call one of our licensed agents at (877) 567-5267 for an expert, personalized consultation. Other public options for individuals with major preexisting conditions dropping their COBRA exist in most states, as do so-called “HIPAA-eligible” plans. Visit your state’s informational page at healthplanone.com to learn more about the publicly funded programs available in your area which benefit groups like pregnant women, children, and low-income families.

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