COBRA Insurance Subsidy Details – 2009 Economic Stimulus Package

COBRA insurance is temporary health care insurance for people who have just lost their job and their health insurance coverage.  It is also used by recent retirees and commonly covers spouses and children as well.  Typically it is used by workers who are between jobs that provide health care and is provided by the previous employer’s medical plan.

Previously, the unemployed person had to pay 100% of the COBRA insurance premium in order to be covered which can be quite expensive.

65% subsidy to COBRA insurance costs

In the new 2009 economic stimulus package – the government will cover 65% of the COBRA premiums for 9 months – given that these costs can be $1,000 per month for a family – this is a significant saving for someone who has just lost their job.

Who is eligible for this?

Anyone who:

  • Was laid off between Sept 1, 2008 and before Dec 31, 2009.
  • Income is less than $125,000 for single personal and $250,000 for couples.

Longer window to apply for COBRA

Another change is that workers who were laid off after September 1, 2008 have another 60 days added to the window where they can apply for COBRA.  This is on top of the traditional 62 day window.

Did you know?

COBRA is short for Consolidated Omnibus Budget Reconciliation Act.   This act was passed in 1986.

16 replies on “COBRA Insurance Subsidy Details – 2009 Economic Stimulus Package”

Thanks for sharing this tip. I recently signed up for my former employers buyout program and actually enrolled in COBRA yesterday. I was previously unaware of this component of the Stim Plan.

My COBRA package is $737/month so a 65% savings equals $479/month. Even better, my former employer is paying a lump sum amount equal to 4 months of COBRA payments. This amount will now stretch much further or further pad my pocket when I get back in the job market. (see my site for articles on both topics!)

Thanks for sharing!

Peachy. Now I’m paying for health insurance for even more people while I can’t afford ANY for my family. Once again the working poor get shafted. Pffft.

I was laid off in February of 2008. It is a shame that I cannot receive the 65% reduction as it starts in September of 2008.

I was laid off from that colossal failure called Citi.

when will this take affect? i just called my cobra provider and they have no info. on it. they still want 1227.14 to sign up for the month of feburary.

HI Stephanie,

I have an answer to your question and the answer is yes.

Cal-Cobra receipients are eligible for 65% subsidy.

if you have any further questions pls contact me on my email.


I qualify but my big question is how to I get the break? I can’t seem to find the “rules” which doesn’t surprise me. Any suggestions? Thanks.

Yes – for Cal-COBRA – how do we take advantage of this 65% break? I am paying out of pocket for right now and the pockets are getting flatter and flatter….

Any suggestions would help as my former employer seems to have no answers. Thanks!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I need to know how to apply for the Blue Cross 65% payment, my previous employers says they don’t know anything about the program.

I have been paying for regular COBRA and recently went on CAL COBRA. I lost my job January 20th, 2009. However, I was never put on their health plan. Instead I continued on COBRA because the coverage was much better and my boss wanted to keep his costs down. So, my COBRA is tied to the job I had 18 months before my most recent job. Can I still get the reduction? I am still looking for work and on EDD at present. Thank you, Lisa Schiffman

the CA senate is holding the CAL COBRA program up by not yet passing the law that will make people from small organizations eligible. Also, don’t look for much savings… regular COBRA premium per month was $1,158 and that was raised to $1,486!!! I am sure that if they get the 65% subsidy Blue Cross Anthem will jack up the rates again

Does anyone know if you have to include severance as part of one’s income to determine eligibility for the COBRA stimulus package subsidy? Getting any information about this from my former employer is nigh on impossible.

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