Tuesday, March 9, 2010

Extensions Galore - UC and COBRA


COBRA subsidized premiums just keep getting extended. First, Congress extended it to February 28, 2010. Last week, Obama signed another extension until March 31, 2010 (Temporary Extension Act of 2010 (.pdf)). Now, Business Insurance reports that Congress is poised to extend the COBRA subsidy through the end of the year.

What COBRA subsidy, you ask? Per the Department of Labor's COBRA web site:
"premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit....and lasts for up to 15 months."
COBRA's not the only unemployment assistance program that seems to keep going and going.

The Washington Post ran an article today, Are Unemployment Benefits No Longer Temporary? It addresses both sides of an ongoing debate over whether the unemployment compensation extensions are too long. UC previously lasted about six months, but in response to the current downturn has been extended to 99 weeks in some states. The article reports that 11.4 million people are collecting UC at a cost of $10 billion a month.

The article is worth a read in its entirety, but in short - Detractors argue UC is becoming a new entitlement program, acting as a disincentive to search for work, and costing more than we can afford. Supporters argue it's necessary for those who have lost their jobs, reasonable given the lack of available jobs, and some people put money in for years, now they need it.

Image: Photograph (taken by me) of the State College, Pennsylvania CareerLink. Among other things, it's where Unemployment Compensation referee hearings are held.

Posted by Philip Miles, an employment lawyer with McQuaide Blasko in State College, Pennsylvania.