Involuntarily Terminated or Laid Off? You May Be Eligible for Subsidized COBRA Coverage

From the GIC Summer 2009 Newsletter

If you are involuntarily laid off or terminated from your job between September 1, 2008 and December 31, 2009, you may be eligible for subsidized COBRA continuation coverage for up to nine months. President Obama signed the American Recovery and Reinvestment Act (ARRA) of 2009 into law on February 17, 2009, which provides reduced premium relief for eligible employees. To be eligible, you:

• Must be eligible for continuation coverage at any time during the period from September 1, 2008 through December 31, 2009 and elect the coverage;
• Must have a continuation coverage election opportunity related to an involuntary termination of employment that occurred at some time during the above noted time period;
• Must not be eligible for Medicare; AND
• Must not be eligible for coverage under any other group health plan, such as a plan sponsored by a successor employer or a spouse’s employer.

Q) What is the subsidized COBRA rate?

A) The federal government will subsidize COBRA by paying 65% of the COBRA premium for qualified beneficiaries. The rate you will pay after the subsidy is listed for all GIC health plans on the COBRA Federal Premium Reduction Under ARRA form.

Q)  How do I get the COBRA Federal Premium Reduction Under ARRA form?

A)  The form is available in the forms section of our website, and will also be mailed to all GIC members who are terminated from their jobs.

Q) I am eligible for deferred retirement, but have been laid off and would like to take advantage of this subsidized COBRA rate. What are my options?

A) If you are eligible for both deferred retirement and subsidized COBRA coverage you may elect the subsidized COBRA health-only coverage for the nine month maximum, then change to full 102% COBRA rates once the nine months of subsidy expire.  During next year’s annual enrollment, you may enroll in deferred retirement effective July 1. 
Note: If you are a state, not municipal, employee, you will lose your basic life insurance coverage under deferred retirement if you elect COBRA coverage.

Q)  I am age 65 (or over) and was involuntarily terminated from my job. Am I eligible for subsidized COBRA coverage?

A)  If you are eligible for Medicare (contact your local Social Security Administration office to determine eligibility), you are not eligible for COBRA. However, if you cover dependents under the age of 65, you may cover them at the subsidized rate for up to nine months and then may continue their coverage for the remaining nine months of COBRA coverage at the 102% COBRA rate.

Q) Our family income is less than or equal to 400% of the Federal Poverty Income Guidelines (for 2009: $88,200 for family of four). Is additional help available to cover my COBRA health coverage?

A) The Massachusetts Division of Unemployment Assistance (DUA) provides additional COBRA reimbursement assistance for families eligible under the state’s Medical Security Program. Contact DUA for details.

To apply for subsidized GIC COBRA coverage, complete and return all of the forms included in the COBRA Federal Premium Reduction Under ARRA form, available on the GIC’s website under the active state employee and municipal forms sections. For additional information of subsidized COBRA, contact the U.S.Department of Labor’s Employee Benefits Security Administration at 1-866-444-3272, or visit their website. For tax guidance on the subsidy, visit the Internal Revenue Service’s website.