Average monthly COBRA enrollment rates among subsidy-eligible employees jumped 20 percentage points between March and November 2009.
According to HR consulting company Hewitt Associates, the enrollment increase highlights how important a federal subsidy benefit (enacted last March) has been for families affected by unemployment.
The consulting firm analyzed 200 large U.S. companies representing 8 million employees. COBRA enrollment rates for subsidy-eligible employees between March and November 2009 averaged 39 percent, compared to 19 percent for the period of September 2008 to February 2009--prior to when the subsidy was enacted, according to Hewitt.
"The subsidy provides laid-off Americans with a cost-effective way to continue getting health insurance coverage, and we expect enrollment rates to remain high until the subsidy expires or the labor market shows signs of improving," said Karen Frost, Hewitt's Health and Welfare Outsourcing leader in a released statement.
The COBRA subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA) requires eligible employees to pay 35 percent of the COBRA premium, or about $3,000 a year for the average worker. Under the original COBRA law, most involuntarily terminated workers were required to pay 100 percent of the health care premium plus an additional 2 percent to cover administrative costs. This translates to roughly $8,800 a year in COBRA health care costs for the average worker, according to the consulting firm.
Companies in the industrial manufacturing and aerospace and defense industries saw the largest overall increases in COBRA enrollment rates for subsidy-eligible employees.
Enrollment rates for eligible employees in the industrial manufacturing industry rose from 7 percent (September 2008 to February 2009) to 67 percent (March 2009 to November 2009).
Companies in the aerospace and defense industry saw the rate of COBRA enrollments more than double, from 30 percent (September 2008 to February 2009) to 63 percent (March 2009 to November 2009).
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