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The Federal Stimulus Package: Help with Health Insurance Premiums

The federal government's economic stimulus package includes money to provide short-term help paying health insurance costs for those who recently lost jobs or who will lose jobs in coming months.

What is it?

• The subsidy program started Feb. 17, 2009. It helps pay the monthly health insurance premium for individuals who involuntarily lose their jobs and qualify under federal COBRA law or Oregon's state continuation program to continue their employer health plan for themselves and their family members. Normally, terminated employees must pay the full costs.
• With this program, individuals pay 35 percent of the health insurance premium. The previous employer or health insurance company pays 65 percent.
• This subsidy is good for up to nine months for those who worked for an employer with 20 or more employees and are eligible to keep their employer plan under COBRA.
• This subsidy is good for up to six months for people who worked for a small business with fewer than 20 workers and are eligible to continue their employer plan through the state continuation program.
• The 65 percent paid by the employer or health insurance company is reimbursed as a credit against their payroll taxes or as a refund.

Who is eligible for the subsidy?

• Employees of businesses with 20 or more employees who are laid off from Sept. 1, 2008, through Dec. 31, 2009. (People who didn't initially continue with their employer plan get a "second chance.")
• Employees of businesses with fewer than 20 employees who lose their job from Feb. 17, 2009, to Dec. 31, 2009.
• Employees of businesses with fewer than 20 employees who were paying for state continuation as of Feb. 17, 2009, may be eligible for the remainder of the six months.
• Job loss must be involuntary and not for gross misconduct. People who quit their jobs are not eligible.
• The employer must be in business and still offer a health insurance plan.
• Full subsidy: Individuals with modified adjusted gross incomes of less than $125,000 ($250,000 for joint filers).
• Partial subsidy: Individuals with modified adjusted gross income between $125,000 and $145,000 ($250,000 and $290,000 for joint filers).
• No subsidy: Individuals with modified adjusted gross income greater than $145,000 ($290,000 for joint filers).

Health Insurance Features

• The health insurance plan is the same plan you had with your employer.
• If your employer offers more than one health plan, the employer can give you the option to select a cheaper insurance plan than you had when you worked for the business
• You won't have to wait to have existing medical conditions paid for by insurance if you participate in the new subsidy program and you previously met your pre-existing condition exclusion period

How you get this help if you qualify under COBRA (employers with 20 or more employees)

• If you lost your job on or after Sept. 1, 2008, your previous employer or health plan administrator must send forms to you by mid-April
• You have 60 days after you get the notice to decide if you want to participate.
• If you are already enrolled in COBRA, you are eligible for the subsidy starting Feb. 17, 2009. (For most people, the first period of subsidy-eligible coverage will begin March 1, 2009.) If you pay the full premium after this date you can get a refund or credit for 65 percent of what you paid.
• You will not be reimbursed for premiums paid before Feb. 17, 2009.

How you get this help if you qualify for state continuation (employers with less than 20 employees)

• Let your employer know immediately that you want to continue your health insurance.
• If you are already enrolled in state continuation, you are eligible for the subsidy starting Feb. 17, 2009. (For most people, the first period of subsidy-eligible coverage will begin March 1, 2009.)
• You will not be reimbursed for premiums paid before Feb. 17, 2009.

All people that receive a subsidy

• You must tell your previous employer or health plan administrator if you are eligible for health insurance through a new employer or become eligible for Medicare. These events end your subsidy.
• If you don't give notice, you may get a tax penalty.