The American Recovery Act of 2009 (ARRA) and What It Means for Artists
By Jim Brown, The Actors Fund
The American Recovery and Reinvestment Act of 2009 (ARRA) includes a provision that will help many recently laid off workers maintain their health insurance by providing a temporary COBRA subsidy.
This is particularly pertinent for artists because, as the NEA reported this month, unemployment among artists in 2008 rose at a greater rate than for the U.S. workforce as a whole. (Click here to read the report.)
Prior to ARRA, workers who were laid off could opt to continue their employer-based coverage through COBRA by paying full premiums (plus a 2% administrative fee) directly to their former employer. In 2008, these monthly premiums averaged approximately $390 for an individual and $1,050 for a family, making COBRA unaffordable to most of the workers who were offered it.
Under ARRA, the federal government will pay 65% of the premium for up to nine months for those who meet the eligibility requirements. During that nine month period participants will pay only 35% of the premium directly to the former employer. The employer may also allow participants to switch to a lower cost plan (if one is offered) to reduce premium costs. ARRA further allows states, charities or other individuals to pay all or part of the 35% on behalf of a participant.
You are eligible if:
- You have been offered COBRA by your employer. If you work at a business that has twenty or more employees, this is a federally protected right. If there are fewer than twenty employees, you may have a state protected right to continuation coverage. To verify if continuation coverage is a protected right in your state, visit http://www.statehealthfacts.org. (The coverage applies to both individual and family coverage plans. However, if you worked for an employer that has gone out of business or stopped offering health insurance to current employees, you will not be offered COBRA.)
- You were involuntarily terminated from your job between September 1, 2008 and December 31, 2009. Alert: If you were terminated after September 1, 2008 and did not elect COBRA, ARRA now allows you a new 60 days to enroll in COBRA. The 60 days begin from the time you receive notice of the subsidy from your employer. Pre-existing condition exclusion periods do not apply to people in this category.
- Your adjusted gross income does not exceed $125,000 for individuals and $250,000 for families. Those with somewhat higher incomes are also eligible for the subsidy, but will need to repay part of it through taxes.
- You are not eligible for Medicare or other coverage.
Of course, this ARRA provision will not be useful to those who are not eligible for COBRA, such as workers who became unemployed before September 1, 2008, and those who have individual insurance plans. And, for some who are eligible, even the subsidized cost will be unaffordable.
There are other options that can be explored in various situations. For example, if you are healthy and under 35 years old, you may be able to purchase an individual plan that is less expensive than the subsidized COBRA plan, which, again, will revert to its full cost after nine months. If you have children, you should look into your state’s SCHIP program to insure them at an even more reduced cost.
As the rules and regulations of the ARRA provision are further clarified, they will be posted on the Department of Labor website, www.dol.gov/ebsa/COBRA.html.
For information on these and other options, visit the Artists Health Insurance Resource Center website. AHIRC.org is a carefully researched, updated database that quickly links to health care and insurance information and services. AHIRC.org is operated by The Actors Fund and sponsored by LINC.