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COBRA subsidies extendedPosted On Thu, April 29, 2010
On Monday, the Internal Revenue Service said that workers who lost their jobs during April and May might be eligible for an insurance subsidy.
For workers who became unemployed during those months, COBRA is offering a 65 percent subsidy on their health insurance premiums. The subsidy was created by the American Recovery and Reinvestment Act to assist workers who became unemployed during the down economy. It will allow them to continue receiving their employer-sponsored health insurance.
The COBRA subsidy, which had expired on March 31, was reinstated on April 15 due to the Continuing Extension Act of 2010. The act allows workers who were fired during between September 1, 2008 and May 31, 2010 to take advantage of the subsidy for a maximum of 15 months. In certain instances, workers who originally had their hours reduced and later lost their jobs might also qualify for the subsidy.
Eligible unemployed workers must pay 35 percent of their COBRA insurance premium in order to receive coverage. Employers are reimbursed for the remaining 65 percent by claiming a tax credit on their returns. Some of the workers that qualify for the subsidy may also be eligible for the health coverage tax credit, which pays for 80 percent of their health insurance premiums.
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