Posted on 10 Feb 2010
Top Senate Democrats are working on a draft jobs bill that would extend and expand federal COBRA health insurance premium subsidies, according to sources.
The draft bill would extend the current COBRA premium subsidy provided to involuntarily terminated employees another three months, allowing employees who were laid off in March through May 2010 to be eligible for the 65% subsidy for up to 15 months.
Under current law, employees involuntarily terminated from Sept. 1, 2008, through Feb. 28, 2010, are eligible for a 15-month premium subsidy.
Sources say the draft bill would allow employees who lost group health insurance coverage due to a reduction in the number of hours they work to receive the COBRA premium subsidy.
The White House earlier proposed extending for 12 months COBRA premium subsidies for employees laid off from March 1 through Dec. 31 of this year.
Other provisions in the draft bill would give employers more time to fund their pension plan obligations. Business groups have been pressing legislators for pension plan funding relief for more than a year. Without such relief, employers will face huge increases in contributions to their plans, which have been battered as low interest rates have caused the value of plan obligations to soar, while the plunge in the equities market has resulted in steep falls in the value of plan assets.
The broader jobs bill still is under discussion, but Senate Democratic leaders would like the measure to be brought before the full Senate by the end of the week, with a vote either this week or next week.
“We have been expecting an extension of the COBRA subsidy, and the Senate could well pass a bill by next week,” said Frank McArdle, a consultant with Hewitt Associates Inc. in Washington.