Health Insurance Subsidy for Employees Expands

The federal government has extended the subsidy for health insurance expenses for employees who are involuntarily separated from their jobs. The law, which was enacted in February 2009 as part of President Obama’s Recovery Act, now requires employers to pay 65% of health insurance continuation costs for employees they terminate prior to February 28, 2010. It  provides up to 15 months worth of this benefit, an expansion of the 9 months provided by the bill in early 2009.

The bill still is aimed solely at helping workers and does not require employers to foot any additional health insurance expense. Though businesses may initially lay out the 65% subsidy, they quickly recoup it via a credit against their payroll tax filings. The original statute provided the health insurance subsidy only to workers who were fired prior to December 31, 2009. Information on the law, which is administered by the U.S. Department of Labor, is available at