Senate passes COBRA subsidy bill

Economic stimulus legislation approved by the Senate Finance Committee on Tuesday would provide temporary federal COBRA health insurance premium subsidies.

Under the measure, approved on a 14-9 vote, the federal government would pay 65% of COBRA for employees who lose their jobs between Sept. 1, 2008, and Dec. 31, 2009. The subsidy would be available for up to nine months.

The COBRA provision is more limited than COBRA changes approved last week by the House Ways and Means Committee, also as part of an economic stimulus bill. That measure is likely headed to a vote Wednesday by the full House.

Under that bill, beneficiaries age 55 and older and employees who have worked at least 10 years for an employer could retain coverage until eligible for Medicare at age 65. That would be a major change from current law that limits COBRA coverage for those terminating employment to 18 months.