Measures Congress passed in 2009 and 2010 that established,
expanded and extended COBRA premium subsidies for laid-off employees
cost the federal government more than $34 billion, according to the
Joint Committee on Taxation.
The first and most costly COBRA subsidy was embedded in a massive
economic stimulus bill Congress passed in February 2009. That law
provided a 65 percent, nine-month, federal premium subsidy for
employees let go from Sept. 1, 2008, through Dec. 31, 2009.
The joint House-Senate panel estimated the subsidy cost the
government $24.7 billion.
As part of a measure authorizing funds for the Defense Department
in December 2009, Congress extended the subsidy to 15 months and
made it available to those losing their jobs through Feb. 28, 2010.
The Joint Committee pegged the cost of that expansion and extension
at nearly $6.5 billion.
A measure Congress passed in March 2010 that further extended the
subsidy to those laid off from March 1 through March 31, 2010, cost
just under $1.1 billion, while a measure signed into law in April
that extended the subsidy to employees laid off from April 1 through
May 31, 2010, cost just more than $2 billion.
The April 2010 measure was the last COBRA premium subsidy
extension lawmakers passed.
The Joint Committee report did not estimate how many employees
and their dependents received the subsidies. However, an analysis by
Hewitt Associates Inc.—now Aon Hewitt Inc.—found that COBRA
enrollment rates among those laid off at 200 large employers doubled
38 percent after the subsidy began.
Filed by Jerry Geisel of Business Insurance,
a sister publication of Workforce
Management. To comment, e-mail editors@workforce.com.
Copyright © 1995- Crain Communications Inc.
All
Rights Reserved. Terms of Use Privacy Statement