In September, House lawmakers approved a bill granting workers in 27 states another 13 weeks of unemployment insurance benefits. For employers, the move may signal that Congress is willing to extend the Dec. 31 eligibility date for the COBRA subsidy program if lawmakers fail to agree on health care legislation by the end of the year.

The sentiment is that the COBRA subsidy is working -- providing health insurance to individuals when they need it most, said Karen Frost, Hewitt's health and welfare outsourcing leader. According to Frost, whether Congress extends the Dec. 31 eligibility date for the subsidy depends on health care reform.

If the unemployment rate continues to rise, lawmakers will probably extend the eligibility date for the program, given that unemployed workers will have a difficult time finding a job and employer-provided health coverage. [However,] if Congress  passes a health care bill by the end of the year, then there is less reason to extend the COBRA program, given that new health care legislation will more likely carry provisions that will cover workers who have been involuntarily terminated.

. . . From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the federal COBRA subsidy averaged 38 percent, a 19 percent jump from the period of September 2008 to February 2009, reports Hewitt Associates.

. . . Employers in the construction, leisure and retail sectors witnessed the largest increases in COBRA enrollment, given that businesses in those industries have turned to massive layoffs to stay afloat. For example, employers in the manufacturing industry faced an 800 percent increase in COBRA enrollments since the subsidy was enacted, Hewitt notes.

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