Appealing Denial of COBRA Subsidy

posted by Kristen Prinz  |  Sep 18, 2009 11:53 AM [EST]  |  applies to Illinois

Most people are now aware that if your employment is involuntarily terminated between September 1, 2008 and December 31, 2009, you may be eligible for the 65% federal subsidy for COBRA. But, what happens if you are denied the subsidy?

The subsidy is available to employees of companies with 20 or more employees that offer health benefits and smaller businesses in states that have Cobra-like coverage, such as Illinois. However, an employee is not eligible if the employee's individual income is more that $125,000 a year or the employee has a household income greater than $250,000 a year. The subsidy is also not available to employees that are eligible for Medicare or other group health coverage.

If you worked for an employer with 20 or more employees and are denied the subsidy, you can file an appeal with the Department of Labor. To date, more than half of the decisions rendered in appeals have been favorable to the employee. The restrictions may not always be clear. While you will know when you are eligible for group coverage through your spouse or a new employer, it is unclear whether coverage offered through a costly retirement plan would bar an employee from access to the subsidy. An appeal can clarify misconceptions and may get a denied employee access to the subsidy.

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