Support Erodes for another COBRA Subsidy Extension

Congressional support for a fourth extension of the COBRA subsidy eligibility period has diminished over the past few weeks, as lawmakers continue to shift their focus to fiscal responsibility.

The eligibility period for the federal COBRA health care premium subsidies under the American Recovery and Reinvestment Act of 2009 (ARRA) ended on May 31, 2010.

Individuals who were involuntarily laid off on or after June 1 are not eligible to receive the 65 percent COBRA premium subsidy and will have to bear the full cost of their COBRA coverage if they elect it. Those assistance-eligible individuals who are already receiving the premium reduction, and are eligible to continue to receive the subsidy for up to 15 months, are not affected.

“Information about ARRA is not being included in notifications for any qualifying event that occurs after May 31, 2010,” said compliance manager Jim Trimble with Ceridian’s Finance & Regulatory Management department.

Although there has been voiced support for providing further financial aid to help involuntarily terminated workers continue their health care coverage, many party leaders feel there’s not enough backing in Congress to pass another COBRA extension.

Some Congressional leaders have even considered reducing the tax subsidy or shortening the 15-month coverage period to make the provision less expensive.

“Forced to make budget choices by their newfound concern about government spending, it looks like Congressional democrats and their union allies favor an extension of unemployment insurance and aid to states to pay teachers over an extension of the COBRA subsidy,” said Jim O’Connell, Ceridian’s legislative affairs consultant.

This info is provide by Ceridian

here is the link for the department of labor info

This bill will:

* Mandate that everyone must have insurance.

* Result in more than 30 million additional people becoming insured.

* Provide for subsidized coverage for people that can’t afford it and increase the number of people that will qualify for Medicaid.

* Make cuts to Medicare Advantage Plans and change their payment formula.

* Increase taxes and fees to many individual Americans and Corporations.

* Make many changes to the way Insurance Companies do business from not allowing them to use pre-existing conditions to limiting their rates based on medical loss ratios.

Many of these elements do not phase in for many years. Those that are most immediate and are expected to occur in 2010 are:

* Tax credits for certain small businesses. (After September 2010)

* Elimination of pre-existing conditions (Click Here for plans available Now through state pool) Not mandatory until 2014 for insurance companies)

* Increase in dependant coverage to age 26.(already available on many plans) Click here

* Creation of a temporary reinsurance program to provide coverage for retirees over 55 who are not eligible for Medicare. (After September 2010 – data available unknown)

* The further creation of a temporary national high risk insurance pool. (After September 2010)

* The prohibition of lifetime limits on benefit payments. (After September 2010)

* Closing the so called “doughnut hole” by providing immediate tax credits for Medicare patients who face a gap in prescription drug coverage.

The real impact in the health insurance system won’t occur until the year 2014. During the interim, there will be the phase-in of additional new taxes that will provide added government revenue to pay for these changes. The four most significant changes occurring in 2014 are:

* Insurers will be required to take all applicants.

* Insurance will be mandated for all Americans.

* Tax credits to help pay premiums will start flowing to middle-class working families.

o The most aid – including help with copayments and deductibles – will be made available for those individuals and families on the lower end of the income scale.

* Insurance exchanges will be created to help administer subsidies for those individuals that require them.

When fully implemented, I believe that the majority of working-age Americans and their families will continue to have employer-sponsored coverage as they do today. In addition, through mandates and other subsidies, the number of people insured can grow by more than 30 million.