Get Reduced COBRA Health Insurance Coverage if You Have Lost a Job or Had Reduced Hours

Filed in archive Information About on May 22, 2010

© Corey T. Burns

When the Recovery Act was passed, it made provisions for those who had lost their jobs to be able to get a subsidy, or a tax credit for COBRA health insurance. Because COBRA health insurance can be so expensive, the government decided to give a break to those who needed it.

In order to qualify for these tax benefits, you will need to have received less hours or been laid off between September 1, 2008 and May 31, 2010. The Recovery Act enables eligible workers to get a reduction of 65 percent, leaving them to only pay 35 percent.

There is also an even larger benefit that some may be eligible to receive. Some may get up to 80 percent of the cost of their COBRA coverage from the Health Coverage Tax Credit (HCTC). This tax credit provides for those who receive Trade Adjustment Assistance benefits, or are between the ages of 55 and 65 and are already getting pension benefits from the Pension Benefit Guaranty Corporation. They also have to be in a qualified health insurance plan to get the benefits.

Individuals who also experienced a cut in their work hours, and at first chose to get the COBRA benefits and then dropped them later are also eligible to get the benefits. Others who chose not to take them at all have a second chance at this greatly reduced rate. There are some limitations on time of eligibility for this benefit, so you may want to act quickly. The IRS Website has more details.