COBRA costs consume unemployment benefits

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COBRA costs consume unemployment benefits, group says

January 8, 2009

A new report by Families USA due out Friday is expected to show that

family COBRA premiums consume 84 percent of unemployment benefits.

The report will be out the same day the U.S. Department of Labor's

Bureau of Labor Statistics is expected to release the latest data

about the number of people who are unemployed.

Families USA, a national organization for health care consumers, says

its report shows why the overwhelming majority of the newly unemployed

are likely to lose their health insurance coverage.

Among other things, according to the release, the report shows that on

a national basis, average COBRA premiums for family coverage consume

approximately 84 percent of average Unemployment Insurance benefits.

Congress passed the landmark Consolidated Omnibus Budget

Reconciliation Act, COBRA, health benefit provisions in 1986. The law

amends the Employee Retirement Income Security Act, the Internal

Revenue Code and the Public Health Service Act to provide continuation

of group health coverage that otherwise might be terminated.

COBRA provides certain former employees, retirees, spouses, former

spouses and dependent children the right to temporary continuation of

health coverage at group rates. The coverage is available only when

coverage is lost due to certain specific events.

Group health coverage for COBRA participants is usually more expensive

than health coverage for active employees, because the employer

usually pays a part of the premium for active employees while COBRA

participants generally pay the entire premium themselves. However, it

is typically less expensive than individual health coverage.

http://www.news-leader.com/article/20090108/BREAKING01/90108043/1007/NEWS01