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Q:  I was told when I called that I could get the new Cobra Subsidy Plan since I was just recently laid off. I have already been paying for it now for 2 months as well, but I have some mixed feeling about it. My husband works and has insurance through his work place and never has been on my insurance before. I didn't not want to go on his work insurance because it cost too much. I read something the other day stating that "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". This was listed under "To be considered an "Assistance Eligible Individual" and get reduced premiums you must...." So does this not make me eligible then after they said I was by phone and I have already been paying the Subsidy Cobra Rate? I don't want to get caught owing them money back when they said I was eligible.

A:  To my knowledge, the latest information if you are eligible for the subsidy is as follows:

The American Recovery and Reinvestment Act of 2009 (also know as the federal stimulus package) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months.

The premium reduction for COBRA continuation coverage is available to "assistance eligible individuals".

An "assistance eligible individual" is the employee or a member of his/her family who:

·         is eligible for COBRA continuation coverage at any time between September 1, 2008 and December 31, 2009;

·         elects COBRA coverage; and

·         is eligible for COBRA as a result of the employee's involuntary termination between September 1, 2008 and December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse's plan) or Medicare are not eligible for the premium reduction. There is no premium reduction for premiums paid for periods of coverage prior to February 17, 2009.

If an individual’s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $125,000 (or $250,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid.

I would recommend speaking with your Cobra administrator again to verify your eligibility, like you said you don’t want to end up owing at tax time, or have a penalty due to this.