Public Employee Press

Obama cuts health costs for laid-off workers

In addition to reducing taxes on millions of working-class families, the Obama administration’s economic stimulus act cuts the cost for laid-off workers to keep their health-care coverage.

Under the federal COBRA law, the unemployed can continue their former employer’s medical insurance for 18 months by paying 102 percent of the cost. COBRA also lets them extend health-related welfare fund benefits, such as those provided by the DC 37 Health and Security Plan.

Responding to the nation’s economic downturn, the economic stimulus plan passed in February temporarily reduces the cost of COBRA coverage. Under the American Recovery and Reinvestment Act of 2009, laid-off employees must pay only 35 percent of the medical and benefit premiums. Washington will reimburse benefit plans and employers for the other 65 percent through a payroll tax credit.

ARRA lets workers laid off between Sept. 1, 2008, and Dec. 31, 2009, pay the reduced premium for up to nine months. Members laid off in that period who did not choose COBRA can now sign up at the lower premium.

In April, the DC 37 plan mailed information to recently laid-off members, including a form they must return with a payment to continue receiving benefits. Members laid off this year will also be notified, but the reduced premiums are not available to workers who take severance offers or buyouts.

Members may opt to continue welfare fund core benefits (podiatry, audiology, supplemental surgical, second surgical opinion and prescription drugs) or all benefits (the above plus dental and vision benefits). The dental and vision benefits cannot be purchased as a package.

The savings under the stimulus act make the quarterly cost for the all-benefits package (including drugs) $59.22 for individuals and $162.36 for families, much less than the full COBRA premium of $169.23 for individuals and $463.89 for families.

“The loss of health-care insurance and other benefits is one of the greatest traumas to our members who lose their jobs,” said Plan Administrator Cynthia Chin-Marshall. “The union and the plan will do all we can to ease the burden of unemployment on any of our members who have the misfortune of losing their job.”

If you have questions about COBRA and the continuation of your benefits or for an application, call the Health and Security Plan Inquiry Unit at 212-815-1234.