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How much did the COBRA subsidy cost?

Christian Schappel
by Christian Schappel
March 29, 2011
1 minute read
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An economic stimulus bill passed in February 2009 created a subsidy that covered 65% of the COBRA premium for laid-off employees. Now we know how much the subsidy program cost taxpayers.
The final tab was $34.3 billion, according to estimates by the Joint Committee on Taxation. The figures were reported by BusinessInsurance.com.
Originally, employees laid off from Sept. 1, 2008 through Dec. 31, 2009 could collect the subsidy for a maximum of nine months.
The subsidy was later extended and expanded by a funding measure for the Defense Department in December 2009. The legislation made the subsidy available to those laid off through Feb. 28, 2010 and extended how long participants could collect it to 15 months.
The Joint Committee on Taxation estimated the cost of that expansion to be nearly $6.5 billion — on top of the $24.7 billion the original measure cost.
Adding to the cost were two other extensions — one in March 2010 and one in April that cost approximately $1.1 billion and $2 billion respectively.
When all was said and done, the subsidy was made available to those laid off through May 31, 2010.
The final subsidies will be given out in August 2011, and the Department of Labor has issued guidance to address the issues that’ll be created when individuals lose their subsidies.
Once an individual exits the subsidy program their COBRA coverage may continue for the remainder of the 18-month coverage period — but only if the premium is paid in full.
Source: “COBRA premium subsidy cost U.S. government $34B: Analysis,” By Jerry Geisel, Business Insurance, 3/15/11.

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