COBRA Expansion Worries Employers

Business Insurance, January 26, 2009

Employers would be required to offer COBRA health care coverage for at least a decade to many former employees and retirees under legislation likely headed for a vote by the full House this week.

The COBRA provisions embedded in the $825 billion economic stimulus package that cleared by the Ways and Means Committee last week, would be a huge expansion of the COBRA law and saddle employers with health care costs few could have imagined when Congress enacted the health care continuation law in 1986.

Under HR 598, employees who stop working as young as age 55 could retain COBRA coverage until becoming eligible for Medicare at 65, regardless of how long they worked for the employer. In addition, any employee who worked at least 10 years for a company could keep COBRA until eligible for Medicare, an entitlement that could stretch for decades in the case of younger workers.

Editor’s Note: We have one employer who called us about HR 598. If the COBRA extension is passed, they say they will terminate their group health insurance program altogether and advise employees to seek medical insurance in the individual market. This is just another sign that employers are becoming increasingly fed up with government meddling in their corporate affairs.

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