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Member, Beacon International Group, Ltd.
WASHINGTON—Federal COBRA premium subsidies will lapse at least temporarily on June 1.
The Senate adjourned for its Memorial Day break early Friday afternoon without taking up any short-term extension of the subsidies. Without the extension, workers who are laid off after May 31 will not be eligible for the subsidy.
Senate Majority Leader Harry Reid, D-Nev., said Thursday that the Senate would not take up the American Jobs and Closing Tax Loopholes Act of 2010 until after the recess. That measure, which the House continued to debate after the Senate adjournment, would extend a variety of federal programs temporarily.
Earlier in the week, House Democratic leaders agreed to pare back by one month an extension of federal COBRA health insurance premium subsidies to the unemployed as part of a broader effort to win support for the broader tax bill to which the COBRA provisions are attached.
With that change, the 15-month, 65% COBRA subsidy would have been provided to employees who are involuntarily terminated through Nov. 30.
House leaders scaled back the extenders bill further after running into resistance from fiscally conservative Democrats, who feared adding to the federal deficit. They shrunk the measure further Friday by removing the COBRA extension and some other provisions.
The House passed the slimmed down extenders bill, which did not contain COBRA subsidies, Friday afternoon.
The House and Senate will return from their recesses the week of June 7, and could extend the subsidies retroactively.