Pugsley: aka, the Sausage.
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To anyone who has lost their job recently and is currently paying COBRA premiums out their wahzoo's, take note:
On Feb. 26th the IRS issued a news release outlining information for employers regarding the new COBRA Subsidy.
As part of the$ 787 billion Stimulus Plan , $24.7 billion will be allocated to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA program.
Here is the composition of the Act:
It means workers who have lost their jobs may qualify for a 65 percent subsidy for COBRA health insurance premiums for themselves and their families for up to nine months.
Eligible workers will only have to pay 35 percent of the premium to their former employers.
This is really good news for someone like myself for example. The new act will take my monthly health insurance payment of $400 down to $142. I'm not sure why it's only 9 months though when COBRA goes to 18 months, but I guess half is better than none.
The way it will work is the employers must treat the 35 percent payment by eligible former employees as full payment, but the employers are entitled to a credit for the other 65 percent of the COBRA cost on their payroll tax returns.
That is some swift finagling and creative accounting by the chiefs in charge.
To qualify, a worker must have been involuntarily separated between Sept. 1, 2008, and Dec. 31, 2009. This subsidy phases out for individuals whose modified adjusted gross income exceeds $125,000 or $250,000 for those filing joint returns. Taxpayers with modified adjusted gross income exceeding $145,000, or $290,000 for those filing joint returns, do not qualify for the subsidy.
Employers have up to 60 days from March 1st to notify former employees of their qualifying status and if eligible, of their reduced premiums. The reduction is supposed to be retroactive back to the date of separation.
I can't believe I'm going to type this but.... thanks President Obama! You are starting to grow on me. I wonder if McCain would have implemented a recovery / relief plan as quickly had he gotten elected instead.
What else do we think is good or bad about the American Recovery and Reinvestment Act of 2009?
Looking at the staggering numbers I do worry that we may be getting in even deeper, or just robbing Peter to pay Paul.
emily the biker pug commented March 3, 2009 7:26 PM
Hope you don't need it for too long.
You have great depth in things you can do.
Ever think as a stand in for Jen A.? there is a resemblence.
I worry about your last sentence also.
Becky commented March 3, 2009 7:53 PM
So glad that this will help you out. Robbing Peter to pay Paul is a good way of putting it. I'm unemployed and will get an additional $25.00 a week and that will help some. BUT, I would rather be working!! Lost my job last July. I think Obama is headed in the right direction though.
Nicole commented March 3, 2009 8:26 PM
I've been dancing around about this for a couple of days now, it's SO awesome. The other part I like is that if you have previously rejected COBRA because it was too expensive (like nick's little sis had to do) they are required to offer it to you again! I LOVE Obama. We also get an extra $25 a week of unemployment. oh yeah. haha.
Kelly commented March 4, 2009 1:29 PM
I agree with the other commenters... I think there is both good and bad to the plan. I wasn't a big Obama supporter but at least he is taking charge and hopefully headed in the right direction.
Kelly commented March 4, 2009 2:06 PM
P.S. $400 a month is OUT RAGEOUS for health insurance for one person!
Lori commented March 4, 2009 2:13 PM
Yea, tell me about it.