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Senate Leaves COBRA Subsidy Behind

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Members of the Senate have voted 60-40 to let an unemployment benefits extension bill that says nothing about the COBRA health benefits subsidy extension come up for a vote.

The House already has approved a version of the bill, H.R. 4213, Promoting American Jobs, Closing Tax Loopholes and Preventing Outsourcing Act, in December 2009

The Senate could vote on final passage of its version of the bill by 9 p.m. Wednesday, according to the Senate floor calendar.

Back in February, when Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, and Sen. Charles Grassley, R-Iowa, the highest ranking Republican on the committee, introduced a version of the bill that became H.R. 4213, the the bill included a provision that would have extended the 65% federal COBRA health benefits extension.

Congress created the subsidy program in early 2009, in response to the high unemployment levels caused by the financial crisis. The subsidy helped workers pay to continue employer-sponsored group health benefits for up to 15 months after they were involuntarily terminated from their employers. Before, terminated employees had to pay up to 102% of the total premium bill to continue coverage.

Now, terminated employees can still get COBRA coverage, but they once again must pay 102% of the cost of the coverage.

Democrats have been struggling to counter criticism from many Republicans and some Democrats that continuing to extend unemployment insurance is too expensive, and they backed away from including the COBRA subsidy extension in the bill weeks ago.

Some insurers and employers welcomed the help the subsidy gave to unemployed workers who wanted to keep their health benefits; others said the subidy increased administrative costs and led to increases in group claims rates.

Sens. Bob Casey, D-Pa., and Sherrod Brown, D-Ohio, had been trying to get the COBRA subsidy renewed.

“When there are few jobs to be had, the inability to afford COBRA premiums becomes an even more acute problem,” Brown said in a statement in June. “I’ve received letters and emails from Ohioans who describe how COBRA is more expensive than rent or food.”


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