WASHINGTON—The U.S. Senate voted 63-33 early Friday to end a Republican filibuster on a military spending bill that would extend federal COBRA health insurance premium subsidies for the unemployed, setting the stage for a final vote on the measure later Friday or Saturday.

H.R. 3326, which the House passed earlier this week, would extend the nine-month, 65% premium federal subsidy by six months for a total of 15 months. It would apply to those who are involuntarily terminated through Feb. 28, 2010.

Under current law, employees who lose their jobs after Dec. 31 are ineligible for the subsidy.

The legislation also would provide another six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation would give beneficiaries whose subsidy ran out and who didn't pay the full premium the opportunity to receive retroactive coverage. For example, a beneficiary whose nine months of subsidized coverage ran out Nov. 30 and who didn't pay the unsubsidized premium for December could pay their 35% share in January and receive COBRA coverage for December.

The legislation would require employers to notify current and future COBRA beneficiaries of the new 15-month premium subsidy.

The fate of the legislation has been followed closely by terminated employees—eager to know if the subsidy will be extended—as well as employers who need to know the amount of the COBRA premiums beneficiaries should pay.

The legislation makes clear that employers can offset future COBRA premiums or issue refund checks to beneficiaries who overpaid their COBRA premium. That could happen if a beneficiary, whose subsidy ran out in November and paid the full premium rather than the 35% share in December.