COBRA Enrollment Doubles After Subsidy

Continuation of medical coverage enrollments under the Consolidated Omnibus Budget Reconciliation Act have doubled since the enactment of subsidized payments for involuntarily terminated employees, according to a recent Hewitt analysis.

COBRA enrollment activity for 200 large U.S. companies representing 8 million employees was examined for the analysis. From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009, Hewitt says.

Under the original COBRA legislation, involuntarily terminated workers were required to pay 100 percent of the health care premium plus an additional 2 percent to cover administrative costs. According to Hewitt, this translates to roughly $8,800 a year in COBRA health care costs for the average worker. Under the COBRA subsidy provisions, eligible workers receive a nine-month subsidy that leaves them responsible for paying only 35 percent of the COBRA premium, or about $3,000 a year.