Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

8 of 13
BACKNEXT
Deciphering COBRA credit
Deciphering COBRA credit
Orit Mizrachi, 35, is a CFO at a hedge fund.
Question: "I was laid off from work and since my company closed down, I wasn't offered COBRA. Will the stimulus package subsidize a portion of the individual coverage I am paying since COBRA wasn't an option for me?" - Orit Mizrachi, New York City

Expert: Nate Purpura, eHealth Inc.

Answer: For workers laid off between Sept. 1, 2008 and Dec. 31, 2009, the government will subsidize 65% of their premiums under COBRA for up to nine months.

If you were laid off during that time period but did not sign up for COBRA, you have an additional 60 days to do so and receive the subsidy. The subsidy is limited to those whose income for the year is $125,000 or less, or to $250,000 for couples filing jointly.

The subsidy is not retroactive and only applies from the law's passage on Feb. 17, 2009, going forward. That means if you've opted for COBRA and paid premiums before the stimulus bill was signed, you won't get a credit or refund for the COBRA premiums you've already paid.

Because Orit's company was closed down, she is not eligible for COBRA. Your employer must continue to exist in order for group coverage to be available. And the subsidy is only available for COBRA payments, not individual health plans, so Orit won't receive any reimbursement.

NEXT: Benefits for seniors, retirees
Last updated February 24 2009: 6:58 AM ET
More Galleries
Best-loved new cars of 2016 These cars are the most beloved among American drivers based on JD Power's annual survey of new vehicle buyers. More
This Indian university cranks out top-tier tech execs Many graduates from the Indian Institute of Technology have gone on to start and lead global tech companies. Here are a few of the most notable alums. More
Most valuable American car up for auction Carroll Shelby's own very first Shelby Cobra will be sold in August. It's almost certain to be the most valuable American car ever sold. More

Special Offer