Congress Leaving Unemployment Benefits Extension To The Last Minute

Senate Majority Leader Harry Reid (D-Nev.) is paring back a jobs bill proposal unveiled earlier on Thursday by the Senate Finance Committee, dropping an extension of unemployment insurance and COBRA health insurance subsidies for laid-off workers. The Senate is taking a break next week, so that stuff will have to wait until the end of the month -- the last moment before the previous extension runs out.

"State agencies are going to start sending out letters next week letting people know that their benefits are going to expire," said Judy Conti, a lobbyist for the National Employment Law Project.

So, even though it's entirely likely that Congress will pass an extension before Feb. 28 -- barring another major blizzard -- people will nevertheless receive letters telling them they're not eligible for the next "tier" of benefits.

Last year's stimulus bill provided up to 53 additional weeks of federally-funded unemployment benefits (broken into several tiers) and a 65 percent subsidy of COBRA health insurance. When those provisions expired at the end of December, Congress scrambled to extend them another three months. If they're allowed to expire at the end of the month, 1.2 million people will exhaust their unemployment benefits in March.

"I think it's disturbing because there are four tiers of emergency unemployment compensation benefits, and if you're on a given tier, you only have a few weeks if the program isn't extended... Individuals could look at running out of benefits in a week or several weeks," said Rich Hobbie, director of the National Association of State Workforce Agencies.

Aside from the anxiety the situation creates for the unemployed, Hobbie said it's a huge administrative burden for state agencies. Norm Isotalo, spokesman for the Michigan Unemployment Insurance Agency, said Congress's dithering does indeed make work for his office.

"February 28 is rapidly approaching and we still don't have any certainty if the ending date is going to be extended, so the agency is preparing to wind down the payments of extended federally-funded unemployment benefits," Isolato told HuffPost. "But on the other hand, we have to be ready to pull the plug on these wind-down efforts if Congress acts. It could be a lot of wind-down work that all may go for naught if Congress extends the deadline date for these programs. And of course we hope that they do."

Isotalo said that even if Congress interrupts his agency's wind-down work at the last second, unemployed Michiganders would not see an interruption of their unemployment checks.

NELP is frustrated that Congress insists on taking a piecemeal approach to extending the benefits (the extensions do not allow people to stay on unemployment insurance for longer than already provided by the stimulus bill -- they allow people who've been laid off more recently access to the same additional tiers of financial support given to people laid off last year). The piecemeal approach guarantees that every extension will happen at the last second.

"It will always be held victim to a blizzard, to partisan politics, a flood in the spring, elections in the fall," said Judy Conti of NELP, which would rather Congress extend benefits for a full year. "What's going on in Congress is an ever-changing game. The American people and communities surviving on these unemployment benefits can't be held victim to this process."

Source: http://www.huffingtonpost.com/2010/02/11/congress-leaving-unemploy_n_458991.html

Understanding COBRA and "Mini-COBRA"

The American Recovery and Reinvestment Act (the economic stimulus legislation) provides assistance with premiums to help involuntarily unemployed workers purchase their former employer's COBRA or other continuation coverage. Originally, the act provided nine months of premium assistance for people laid off between September 1, 2008, and December 31, 2009. However, emergency legislation that President Obama signed into law on December 19, 2009, has extended this assistance: People can now get assistance paying for their COBRA premiums for up to 15 months if they were laid off between September 1, 2008, and February 28, 2010. Furthermore, in 2010, Congress may consider passing legislation that assists people who are laid off later than February as part of the anticipated jobs bill.

Currently, under the act and its extension, for up to 15 months, eligible unemployed workers will need to pay only 35 percent of their total COBRA premiums to continue the health coverage that they had through their jobs, and the federal government will reimburse employers or health plans for the remaining 65 percent of premiums. People are eligible for premium assistance if they were (or are) laid off between September 1, 2008, and February 28, 2010; have annual income during the tax year that does not exceed $145,000 for individuals and $290,000 for families; have a right to continued health coverage under COBRA or another law; and are not eligible for coverage under another group plan (such as through a spouse’s employer) or for Medicare. People with adjusted gross incomes between $125,000 and $145,000 (or between $250,000 and $290,000 for joint filers) will need to repay a portion of the assistance that they receive, while people with incomes below $125,000 for single filers and below $250,000 for joint filers are eligible for full assistance with no repayment.

More: http://familiesusa.org/issues/private-insurance/understanding-cobra-premium.html

Senate Approves Unemployment, COBRA Extensions

The U.S. Senate, on an 88-10 vote, today approved the 2010 defense appropriations bills which also includes the temporary extension of jobless benefits and a government subsidy for COBRA health insurance premiums.

President Barack Obama, who supports the legislation, must now sign the law for the aid to the unemployed to take effect.

The much-awaited vote, which had been held up because of the debate over the health care package, came in a rare Saturday session for the Senate at about 5:30 a.m. today.

If signed by the President, the bill would continue several extensions of unemployment benefits through Feb. 28. An extra $25 a week payment approved by Congress earlier this year in the economic stimulus package also will be extended two months.

In addition, the bill  extend a 65% government subsidy on COBRA health insurance premiums from the current nine months to 15 months. People who get laid off over the next two months who have COBRA coverage through their companies also will be eligible for the subsidy.

Both the unemployment extension and COBRA subsidy were due to expire Dec. 31, which would have cut benefits to millions of jobless workers. Already thousands of people have lost the COBRA subsidy after exhausting the current nine months of benefits in November.  They will now be able to get the subsidy for six more months.