COBRA Subsidy

There are a few rules to the COBRA subsidy for the 65% payment of which I was formerly unaware. All these things pass into law and look great on paper, but when the rules finally come trickling down, there's always a catch. A few random things are included here.

There are income limitations that can make people ineligible for the subsidy. These limitations are based on adjusted gross income and vary depending on if a person is filing as single or married. If a person mistakenly doesn't read the paperwork closely enough and signs that they're eligible when they're not, the IRS will recoup the subsidy at tax time.

The money isn't coming directly from the government. Initially, the employer has to pay the subsidy amount and then the IRS reimburses the employer. Eligibility for the subsidy was 3-1-09, but in the case of my husband and I, we still haven't been reimbursed for our subsidy amount (we paid the full COBRA cost and now have insurance through my employer). This administrative hitch is the reason why.

You have to be involuntarily terminated by the employer to qualify for the subsidy. If you left voluntarily, tough cookies. (You'll still probably qualify for COBRA, just at the regular rate).

You can't be eligible to be covered under any other employer based coverage to be eligible for the subsidy. So, if you're spouse is still employed, but his/her insurance is crappy and covers nothing unless you pay a gigantic deductible, touch cookies. You don't qualify for the subsidy (technically--I have no way of knowing how the COBRA administrator or government would ever check up on this, but it is part of the official rules).