How The Stimulus Package Can Help the Unemployed With Health Care

by Dual Income No Kids on March 11, 2009 · 1 comment

People who have recently found themselves joining the ever growing ranks of the unemployed face more worries than just how they are going to pay their bills. Employment not only offers stability in the form of steady paychecks, it also adds a benefit that many people find irreplaceable; affordable health care. For individuals who have recently lost their jobs between September and December of 2008 there is hope you may find relief in your health care expenses through the recent stimulus bill.

How will it help?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives qualifying individuals who face voluntary or involuntary job loss the opportunity to extend their company sponsored health insurance. While this seems like a great opportunity many people simply cannot take advantage of this extension due to the cost; qualified individuals may be required to pay the entire premium for continued coverage. When you consider the loss of a steady paycheck, the cost is often more than a family struggling financially can consider. Here is how the stimulus package will affect your health coverage options:

The government will now cover 65% of your COBRA payment. You will still be responsible for paying your share of the monthly payment (most likely to your former employer) and the remainder will be made up in the form of a tax credit for your former employer. Please note that you will not receive credit for payments you have already made, the bill does not work retroactively and only applies to payments made after it becomes law.

If you did not elect to continue your health coverage, it is not too late to take advantage of the extension. Employers must offer you the chance to sign up for the COBRA extension.

You are eligible for the subsidy for a maximum of 12 months. If at some point in time you become eligible for coverage (you find a new job) you will no longer be eligible for the subsidy.

You are eligible for the subsidy if you lose your job anytime from this point forward until 2010 as long as you haven’t exhausted you 12 months of subsidy coverage.

Additional benefits for the unemployed.

In addition to making health care affordable, unemployed individuals will see additional benefits from the stimulus package.

An increase of $25 per week in unemployment benefits. This may not seem like a large amount but every lit bit helps.

People are eligible to receive an additional 20 weeks of unemployment benefits in all states with individuals who live in a state with a high unemployment rate eligible for an additional 13 weeks.

Unemployment benefits are taxable, however the first $2400 of unemployment benefits will be tax free in 2009.

Trisha Wagner is a freelance writer for, a debt community and debt forum. Trisha writes regularly on the topics of getting out of debt and personal finance.

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