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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
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