Stimulus allows health coverage to continue for fired workers

Q&A with John Papahronis

published in The Oklahoman | March 3, 2009

Employee benefits attorney and McAfee & Taft shareholder John Papahronis was featured in The Oklahoman discussing the subsidy designed to help people who have been involuntarily terminated from employment continue to afford medical coverage through COBRA. The COBRA subsidy was part of the American Recovery and Reinvestment Act of 2009, also known as the stimulus package, signed into law by President Obama on February 17th.

“The new law provides for a nine-month federal subsidy of 65 percent of the cost of COBRA continuation health insurance premiums for people who have been involuntarily terminated,” Papahronis told the Oklahoman. “For example, a person who is used to paying $1,000 for amonthly COBRA premium would see his monthly payment temporarily reduced to $350 for nine months.”

Papahronis said that some employers choose to pay part of the COBRA premium for their involuntarily terminated employees and that the federal subsidy still applies in these situations.

“The federal subsidy would be calculated on the remaining amount of the COBRA premium that the qualified beneficiary is required to pay,” Papahronis told the Oklahoman. “For example, if the COBRA premium is $1,000 per month and the employer pays $500, the federal subsidy would be 65 percent of the remaining $500 that the former employee would otherwise be responsible for.”

McAfee & Taft distributed an Employee Benefits Alert on February 20th that provides additional details regarding the COBRA subsidy.