Sunday, October 31, 2010

Stimulus Plan Helps the Unemployed Save Money on Health Insurance Costs

Did you know that you can save 65% on your COBRA health insurance premium payments? With the signing of the Economic Stimulus Bill (The American Recovery Reinvestment Act of 2009), qualified individuals can save a significant amount of money if they qualify.

To Qualify for the COBRA Savings

You must have been involuntarily separated from your job between September 1, 2008 and December 31, 2009. The key word here is involuntarily. If you quit your job, you are not eligible for the premium savings.

Opt to receive COBRA benefits. Even if you initially decided that you could not afford COBRA and didn't extend your health insurance coverage when you were terminated, you can now opt to receive the benefits. If you were terminated between September 1, 2008 and February 16, 2009, you have 60 days in which to opt in.

Meet the income requirements. If your adjusted gross income falls below $125,000 as an individual and $250,000 filing jointly then you qualify. If you earn between $125,000 and $145,000 individually and $250,000 and $290,000 jointly, you still qualify for a savings, but you won't be able to participate in the full 65% savings. The savings dwindle on a sliding scale. If you earn over $145,000 individually and $290,000 jointly, you cannot qualify for the COBRA savings.

For more up-to-date information follow these links to the topic specific page on the IRS website and the Department of Labor site.