Jobless workers flock to COBRA

USA Today reports:

A federal subsidy designed to make health insurance more affordable for laid-off workers has led to a doubling in the number of people who have opted to continue their former employer's coverage.

The coverage, known as COBRA, allows people who leave their jobs to continue their former employer's health coverage for up to 18 months. In the past, they were required to pay the entire premium, plus a 2% administrative fee, making COBRA unaffordable for most unemployed workers.

But the economic stimulus package signed into law in February subsidizes 65% of COBRA premiums for some recipients — workers laid off between Sept. 1, 2008, and the end of this year. That means the average family can continue COBRA coverage for $377 a month, vs. more than $1,000 a month without the government subsidies, according to the Kaiser Family Foundation.

The result has been a doubling of enrollments, according to an analysis by Hewitt Associates, a human resources consulting firm. From March through June, the firm found monthly enrollment rates for eligible workers averaged 38%. It was only 19% for the period from September 2008 through February 2009. The analysis was based on enrollment rates at 200 large U.S. companies with 8 million employees.