Helping laid-off employees pay to continue group health benefits led to an increase in continuation rates, but not as much as policymakers had hoped.
Ceridian Benefits Services, St. Petersburg, Fla., a benefits administration unit of Ceridian Corp., Minneapolis, is estimating that the takeup rate has increased to 18%, from 12%. Although the participation rate is higher than it used to be, the increase was lower than many members of Congress and others had expected, the firm says.
In the past, workers who were eligible for the Consolidated Omnibus Budget Reconciliation Act health benefits continuation program had to 102% of the cost of the underyling health coverage.
This year, as a result of the COBRA subsidy provision in the American Recovery and Reinvestment Act of 2009, laid-off employees can pay just 35% of the cost of the coverage. Employers must pay the other 65% of the cost, but the federal government is supposed to reimburse employers for COBRA expenditures.