COBRA Benefits Subsidy in the 2009 Economic Stimulus Recovery Act

The US economy has been going through difficult times for well over a year now, with stock prices plummeting, real estate foreclosures at all time highs, and unemployment levels higher than they have been in decades. The US government passed a broad economic stimulus package in early 2009 to help people cope with these issues, and today I have a question about how the 2009 stimulus package assists people with COBRA medical benefits.

Carol writes:

I was let go of my job on July 3, 2009. I am now receiving unemployment benefits and I pay 675.00 per month for Cobra medical benefits. The 675.00 monthly includes medical, dental, and eye care. Am I eligible to receive a reduced rate on the Cobra health insurance due to the stimulus package? What are my responsibilities and the employers responsibility to receive these benefits. My employer has not notified me of any changes in my Cobra benefits or payments presently.

Hello Carol,

I’m sorry to hear about your layoff. While the economy has improved in some places, it looks like we are still a long way from a full recovery. The 2009 stimulus plan passed by the Obama Administration included some provisions for unemployment and COBRA benefits. You can read more about these benefits in this article: 2009 Economic Stimulus Plan Unemployment Benefits.

COBRA benefits subsidy – 2009 stimulus plan

As part of this stimulus bill, the government will subsidize 65% of the COBRA premiums for workers who were laid off between Sept. 1, 2008, and Dec. 31, 2009. The company is required to provide the 65% subsidy, and will later receive a reimbursement from the government. This is fairly new, so many companies may not yet be aware of the subsidy, or how it works. Be sure to contact your former Human Resources department, and have patience while they learn the new process.

The stimulus package also provides additional funding to supplement the level of Medicaid available to unemployed workers who cannot sign up for COBRA Coverage because their former employer did not offer a health care plan or who cannot afford health care.

Additional unemployment benefits

Unemployment benefits were also increased as part of this stimulus package. Some of the benefits include:

  • Longer duration of unemployment benefits. Additional 20 weeks of standard unemployment benefits, and up to 13 more weeks on top of that for unemployed workers living in a “high unemployment state.”
  • Increased unemployment benefits. Temporary increase of $25 per week.
  • Tax exemption of some unemployment benefits. Federal tax exemption of the first $2,400 of unemployment benefits paid in 2009.

Additional unemployment benefits and COBRA benefits information:

For more information about COBRA benefits extensions please visit the Department of Labor:

General information about unemployment benefits and COBRA benefits:

Best of luck to everyone who is searching for new work.

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Date published: August 14, 2009. Last updated: September 2, 2009.

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Ryan Guina is the founder and editor of this site. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He also writes about money management, small business, and career topics at Cash Money Life. You can also see his profile on Google.

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