WASHINGTON, DC - U.S. Representative Adam Schiff introduced legislation today - the COBRA Coverage Act of 2003 - to make it easier and less expensive for laid-off workers to keep their health insurance.
"When someone loses their job, more often than not, they also lose their health insurance," Rep. Schiff said. "In this time of economic hardship - with unemployment at 6.7% in California - we need to do everything we can to make health care more affordable and accessible for working families My bill will make it easier and less expensive for unemployed workers and their families to keep their health insurance."
Specifically, Rep. Schiff's bill would provide a tax credit to the laid-off workers' employer to go towards the cost of COBRA coverage, up to a maximum of $110 for an individual and $290 for a family per month. Because the tax credit would be administered through the employer, the COBRA Coverage Act would provide immediate relief to workers, helping them to afford health insurance now, instead of waiting for a tax credit at the end of the year.
Under the existing Consolidated Omnibus Budget Reconciliation Act of 1985 - commonly referred to as COBRA - laid-off workers are allowed to remain in their employer-based health insurance plan for up to 18 months, provided they pay the full premium (their share plus the employer share) of the health insurance plus a small administrative fee. The problem is, according to a 2002 Kaiser Family Foundation study, health care premiums for employment-based coverage averages almost $255 per month for self-only coverage ($3,060 per year) and about $663 per month for family coverage ($7,954 per year).
Rep. Schiff's bill would give a tax credit to employers, requiring them to pay for 50% of the employee's health insurance costs (up to $110 per person, $290 per family a month). The company would then be reimbursed for the entire cost at the end of the year through the tax credit.
Rep. Schiff represents California’s 29th Congressional District, including the communities of Alhambra, Altadena, Burbank, East Pasadena, East San Gabriel, Glendale, Monterey Park, Pasadena, San Gabriel, South Pasadena and Temple City.