Congress races to restore benefits subsidy for laid-off workers

By Lisa Mascaro

Published Wednesday, Dec. 2, 2009 | 4:06 p.m.

Updated Thursday, Dec. 3, 2009 | 2:01 a.m.

WASHINGTON -- Buried amid the promises of new bridges, roads and recessionary aid in the Recovery Act passed this year by Congress was one tangible benefit for the unemployed: a subsidy to help pay health benefits for those who are laid off.

This week the nine-month subsidy begins to phase out, leaving Congress scrambling to renew the aid.

For Nevada families, who would pay $1,038 a month on average to continue to receive employer-sponsored health care benefits, the savings are substantial. According to a report from Families USA, a health care advocacy organization, average costs with the subsidy drop to $363 a month.

Estimates show 7 million Americans would benefit from the subsidy, according to the Congressional Budget Office. The cost was estimated at $25 billion.

“This is a benefit that’s very important,” said Ron Pollack, executive director of Families USA. “It has been a lifeline. That lifeline is now being withdrawn.”

Under the $787 billion American Recovery and Reinvestment Act passed in February, those who are laid off from their jobs can receive the subsidy to help pay for employer-sponsored health care benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985. COBRA allows laid-off workers to continue their health insurance through their former employer for 18 months if they pay the full premium cost and possible administrative costs.

For many jobless people, however, COBRA premiums are too pricey. The Families USA study found that in several states premium costs exceed unemployment benefits.

In Nevada a laid-off worker would spend 75 percent of his average monthly $1,378 unemployment check to pay the insurance premium, the report said.

Under the Recovery Act, the government provides 65 percent toward the costs of premiums for nine months. The program began in March, and those who signed up then have now exhausted the benefit.

December is the final month to sign up for the subsidy, and those who enroll now will receive the subsidy through August. Those who are laid off next month will be ineligible unless Congress extends the program.

Senate Majority Leader Harry Reid has indicated that he wants the program continued, as have Nevada’s other Democratic members of Congress, who all supported the Recovery Act. Bills are pending before the House and Senate to extend the subsidy.

“With Southern Nevada facing high unemployment, extending the COBRA subsidy will help Nevadans who have lost their job afford health care coverage,” said Andrew Stoddard, a spokesman for Democratic Rep. Dina Titus.

“We need to aid Americans struggling to maintain insurance coverage when they’ve lost a job,” Rep. Shelley Berkley said. “We should work to extend COBRA subsidies for Nevadans and others.”

Nevada’s Republican congressmen, Sen. John Ensign and Rep. Dean Heller, voted against the Recovery Act.

When asked about extending the benefit during a radio show Monday on KXNT 840-AM, Ensign said he was unfamiliar with the pending legislation, but said it is “something we should probably look into, especially for states that have real high unemployment like Nevada.”

Nevada’s unemployment rate was 13 percent in October, second only to Michigan. More than 175,000 Nevadans were unemployed, and of those, 129,700 are in the Las Vegas area.

The Treasury Department, which is compiling information on the number of Americans drawing the COBRA subsidy, could not provide information on how many Nevadans are participating.