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Member, Beacon International Group, Ltd.
LAWMAKERS ON CAPITOL HILL are debating whether to extend the federal COBRA premium subsidy again.
The issue, on which Congress is likely to decide soon, is one on which we have decidedly mixed feelings.
At the time the original subsidy legislation was passed in February 2009, we backed it as a reasonable approach as the country headed into its worst economic downturn since the 1930s.
COBRA was conceived as a bridge to help employees and their dependents maintain group coverage when they otherwise would have lost it, such as a result of a layoff.
While the premiums would be costly, beneficiaries typically could afford them if they were out of work for only a couple of months and would have group coverage again through their new employers. But the economic downturn made it much more difficult to get new jobs and, with that, new group coverage quickly.
And with no regular income, many laid-off employees lacked the means to pay COBRA premiums. Congress recognized that problem and passed legislation in which the government pays 65% of laid-off workers' premiums for a period of time.
We think the subsidy law has served a good purpose. It has allowed millions of laid-off employees to maintain coverage, increasing the likelihood that their medical problems were treated promptly before they developed into expensive-to-treat complications.
But such laws can't be continued indefinitely; the cost to the government and taxpayers is too high. Still, fair warning should be provided to the public. Lawmakers gave no such warning prior to the May 31 subsidy expiration. We think a fair and reasonable approach would be for lawmakers to provide one more extensionperhaps two monthsand make it clear that will be the last one.